This thesis discusses the ethical merits and deficiencies of two economic instruments meant to deal with the externality of pollution; carbon taxes, and emission trading systems. It first explores their philosophical heritage, owed to Arthur Cecil Pigou and Ronald Coase, respectively. It then discusses the aforementioned economic instruments and their practical implications. Finally, these instruments are analysed through the perspective of the works of three philosophers of politics and economics: Debra Satz, Michael Sandel, and Robert Nozick. This thesis concludes by stating that the ethical concerns of each of the instruments do not differ enough to determine a clear victor.