Carbon pricing is an economic strategy aimed at reducing greenhouse gas emissions by assigning a cost to carbon dioxide emissions. This approach encourages businesses and individuals to lower their carbon footprint by making polluting activities more expensive. There are two main types of carbon pricing: carbon taxes, which directly charge a fee per ton of emissions, and cap-and-trade systems, which set a limit on total emissions and allow companies to buy and sell permits. By putting a price on carbon, governments aim to incentivize cleaner energy sources and promote sustainable practices. This can lead to innovation in renewable energy technologies and help combat climate change by reducing overall emissions in the atmosphere.