Climate mitigation policy instruments – UGC NET Question

Statements C and D are wrong, whereas A and B correctly describe carbon taxes and emissions trading. Market-based instruments are important but usually need to be complemented by regulations, technology policies and behavioural measures, so they are not always sufficient on their own. Fossil fuel subsidies in fact encourage continued use of high-carbon fuels and hinder transitions to low-carbon systems. Therefore, the wrong statements are C and D together.

Option A:
Option A is incorrect because it picks C only and ignores D, even though fossil fuel subsidies also contradict the idea of low-carbon transition. Selecting only C fails to identify all wrong statements.

Option B:
Option B is correct as it recognises that both C and D misrepresent mitigation policies. It acknowledges the complementary role of regulatory instruments and notes that fossil fuel subsidies are inconsistent with climate goals. This combination therefore matches the requirement to select the wrong statement or statements.

Option C:
Option C is incorrect because it includes B, C and D as wrong. Statement B is actually correct in explaining how cap-and-trade systems work, so grouping it with the wrong statements makes this option invalid.

Option D:
Option D is incorrect since it singles out D only as wrong and treats C as correct. Accepting C would imply that market instruments alone make regulations redundant, which is not supported by climate policy practice.