What is the purpose of Carbon Pricing?

The purpose of carbon pricing is centered around the concept of assigning a cost to carbon emissions. This mechanism encourages businesses and individuals to reduce their carbon footprint by internalizing the environmental costs associated with greenhouse gas emissions. When carbon emissions are priced, it reflects the true cost of their impact on climate change, thereby incentivizing more sustainable practices and behaviors.

By putting a price on carbon, it drives innovation in cleaner technologies and can lead to the development of renewable energy sources. This financial signal helps create a market-driven approach to reducing emissions, compelling companies to find ways to minimize their carbon output as a means to lower costs and enhance profitability. Ultimately, carbon pricing serves as a crucial tool in addressing climate change by aligning economic incentives with environmental goals.

The other options, while related to sustainability efforts, do not capture the central function of carbon pricing as effectively as assigning a cost to carbon emissions does. Providing financial support for green projects is a different strategy in sustainability and not the primary objective of carbon pricing. Measuring greenhouse gas savings is also vital in understanding and reporting emissions but doesn't directly reflect the pricing mechanism itself. Additionally, eliminating carbon emissions entirely is an ambitious goal but not the direct purpose of carbon pricing, which aims more at reducing emissions rather than complete elimination.