Roman, PhilippePare, LouisLouisPare2025-05-142025-05-142025-05-142021https://hdl.handle.net/2078.2/25435Recent years, carbon taxation as a mean to mitigate climate change gained a lot of attraction. In this paper an alternative carbon pricing mechanism is investigated: Personal Carbon Trading (PCT), a downstream cap-and-trade scheme. The relative merits of PCT and carbon tax are analysed by reviewing the PCT literature on the basis of effectivity, cost-effectivity and distributional impact. This comparison shows that PCT are more effective than carbon taxes if implemented with an independent committee to control carbon prices. It further points out that PCT have the potential to decrease carbon emissions far more than carbon taxes, by changing preferences and norms and by increasing visibility of carbon emissions. On the other hand, the high transaction costs have often been an argument against its introduction. This paper highlights the difficulties to take those behavioural effects into account when comparing the cost-effectivity between two schemes. Under some conditions carbon taxes and PCT have the same qualities in terms of distributional impact. What determines the regressivity or the progressivity of the scheme depends on how the revenues of the carbon tax and PCT are redistributed.Personal Carbon TradingCarbon pricingCarbon taxtext::thesis::master thesisthesis:32888