The comparative study on carbon taxes and carbon trading mechanisms under conditions of uncertainty

Global warming has become the most serious challenges the world are facing, and excessive emissions of greenhouse gases has caused widespread concern. In response to the worse-becoming environmental pollution and the greenhouse effect, two measures are commonly adopted in the world to suppress carbon dioxide emissions, namely carbon tax and carbon trading. Dynamic time model is utilized in this paper to analyze the comparative study on carbon taxes and carbon trading mechanisms under conditions of uncertainty. The conclusion shows that: 1. When the degree of tilt marginal abatement cost curve is greater and the degree of tilt marginal revenue curve more hours is smaller, the carbon tax has a comparative advantage gradually, otherwise the carbon trading mechanism has a comparative advantage gradually. 2. With the increase of the stock retention rate, carbon trading mechanism has a comparative advantage gradually.3. With the increase of time discount, carbon trading has a comparative advantage gradually.4.Correlation exists between the presence of abatement cost and emission reduction benefits.