The article discusses ways to control CO2 emissions efficiently using national taxes and international trading among countries. Countries in groups like the EU aim to hit emissions targets through a mix of trading and taxing. To work best, countries should avoid using overlapping taxes and set tax rates equal to permit prices. In smaller countries, flexible tax rates in the trading sector lead to efficient emissions control. But in larger countries without optimal tariffs, emissions taxes or subsidies can serve as effective substitutes. A central authority is needed for countries to achieve efficiency by ensuring cost effectiveness and avoiding overlapping taxes. The findings compare the welfare of large and small countries in emissions control.