Consequently, the level of GHG-intensive production and consumption activity is higher than is socially optimal. The most cost-effective means of ensuring that these external costs are internalised is to price emissions, either through an emission tax or a cap-and-trade scheme (which sets a cap on emissions and allows trade in emission permits). This will encourage producers and consumers to exploit abatement opportunities to the extent that their marginal abatement costs are less than the price of emitting GHGs.