Abstract
Global warming is a serious problem which requires an urgent solution.
In economics context, economists believe that carbon pricing,
specifically carbon tax and its mirror image, cap and trade, are the
best options and they suggest all countries should use it to address
global warming (Goulder & Schein, 2013). However, advantages and
disadvantages of carbon pricing have often resulted in some countries
accepting the idea and some rejecting it. Therefore, this literature
explains how the carbon tax, and cap-and trade work; the probability of
their success, specifically in reducing greenhouse gas emissions, and
how to attract countries that resist the idea of carbon pricing into
implementing it. And finally, this article explains why a carbon offset
scheme, under cap and trade, best fits developing countries and which
Papua New Guinea can use to improve the lives of its citizens while, at
the same time, reducing the concentration of greenhouse gases in the
atmosphere.