Introduction Carbon tax is an environmental tax that will be collected fromcarbon emitting products. It is a form of carbon pricing.

. Scientists have pointed to the potential effects on the climate system of releasing greenhouse gases (GHGs) into the atmospher. Since GHG emissions caused by the combustion of fossil fuels are closely related to the carbon content of the respective fuels, a tax on these emissions can be levied by taxing the carbon content of fossil fuels at any point in the product cycle of the fuel. Carbon tax offers a potentially cost effective means of reducing greenhouse gas emissions. Cap and trade system, on the other hand, is a market-based approach used to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants. A central authority (usually a governmental body) sets a limit or cap on the amount of a pollutant that may be emitted. The limit or cap is allocated or sold to firms in the form of emissions permits which represent the right to emit or discharge a specific volume of the specified pollutant. Firms are required to hold a number of permits equivalent to their emissions. The total number of permits cannot exceed the cap, limiting total emissions to that level. Firms that need to increase their volume of emissions must buy permits from those who require fewer permits. The transfer of permits is referred to as a trade. In effect, the buyer is paying a charge for polluting, while the seller is being rewarded for having reduced emissions. Thus, in theory, those who can reduce emissions most cheaply will do so, achieving the pollution reduction at the lowest cost to society. Nowadays, world emission has significantly risen up. Climate changes are experienced all over the world and this is due to the increasing temperature that is brought by the trapped greenhouse gases in the atmosphere. If this scenario worsen, the only place where life is known to exist yet will die. To prevent it from happening, professionals in every field are thinking of ways to lessen carbon emission. Carbon tax and Cap and trade system are 2 of the best brainchilds of carbon emission reduction. Philippines, in a smaller scale, likewise contributes to this alarming rate of increase in carbon emission. We are actually included in the Top 25% of the worlds biggest carbon emitters ranging from 45 50th spot out of roughly 200 nations. In this case therefore, we also need to take part in reducing this carbon emission by any means. The researchers had therefore thought of implementing either of these two most popular ways of reducing carbon emission of the Philippines. Biggest carbon emitting companies in the Philippines will be interviewed and further analysis will be made for assessment of which would better help the Philippines carbon emission: Carbon tax or Cap and trade system?