There are two options to tag a price on “bad” technology or behavior: imposing a tax or establishing a cap-and-trade regime. In theory, the two options should deliver the same results, because quantities and prices determine each other, regardless of where you start from. And despite the beauty of an emission trading system resembling an ideal market, economists tend to prefer a tax.
A tax is simple, provides easily accessible information and creates forward guidance for all economic agents. However, vested interests tend to hijack the debate and exploit the confusion about the variety of policy options. I fear a bazar might emerge, a bazar that may lead to inefficient measures and even have a taste of planned economy.