[meowkit]

Cap & Trade (as I understand it) would be the government playing referrer, and polluters/cleaners building a market place to exchange credits.

Taxing would involve playing referrer, collecting taxes for this specific issue, and then allocating that tax to either public or private parties to work on productive behavior.

Taxing sounds more problematic given how dysfunctional most governments are, especially when it comes to non-regulatory procedures. More failure points in the market generation.

A variable tax to disincentivize pollution combined with cap and trade would make the most sense to me.