Consider the following statements regarding mechanisms of carbon pricing:
1. An emissions tax imposes a charge based on the total greenhouse gas emissions, calculated from the carbon content of fuels consumed.
2. A cap-and-trade system establishes an emissions ceiling, allowing entities to buy and sell emission permits in a carbon market to incentivize reductions.
3. A border tax adjustment imposes a carbon tax on imported goods according to the emissions released during their production to prevent carbon leakage.
Which of the statements given above is/are correct?
1
1 and 2 only
2
2 and 3 only
3
1 and 3 only
4
1, 2, and 3