I argued in this chapter that a carbon tax and cap-and-trade system were fundamentally equivalent. Yet some people who strongly support action to reduce emissions truly hate cap and trade. See one argument here. While a few good points are made, I think they are being a bit too harsh on that policy. On the other hand, most economists view a carbon tax as the best approach. The U.S. Congressional Budget Office has released a detailed analyses of impact of a carbon tax on emissions and the economy.
One of the great ironies of the present debate is the vociferous opposition of U.S. Republicans to cap and trade. This article explains how the concept of cap-and-trade first emerged from the Reagan White House as a way for the free market to solve environmental problems. Times have indeed changed! Richard Conniff, “Blue Sky Thinking: The Political History of Cap and Trade,” Smithsonian Magazine, August 2009.
But things may be changing again. Beneath the surface, some conservatives are coming to grips with climate change and have decided a carbon tax is the best way to deal with it. See this NYTimes editorial for an argument in favor of a carbon tax.