Carbon pricing puts a fee on activities that leads to greenhouse gas emissions. This is a way to incentivize businesses to make the right decisions for the environment as it will directly affect their bottom line. The price in itself reflects the effects of emission, i.e. costs to public, rising temperatures and sea levels, lower air quality etc. This can be used to generate revenue in the economy and can be used for other green initiatives, thus creating a virtuous cycle. In a way, everything businesses do that are harmful to the environment are subsidized- The associated costs doesn’t affect their bottom-line. Carbon pricing is a neat way to bring that back into the economic machine. This can also incentivize where investors put their money in. The carbon price could make it more expensive to run conventional companies, making green-tech companies more attractive.