"Following the Kyoto Protocol, some countries have introduced (or are planning to introduce) a cap-and-trade system to curb carbon dioxide emissions from power generation and large industry. In most of the rest of the world, especially emerging economies, such a broad carbon cost is not imminent, and they therefore benefit from a distortion of competition. This paper explores various policy options that aim to restore a level CO2 playing field, and outlines the challenges and opportunities associated with their introduction."

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