Carbon emission is one of the major issues world wide. Being a global issue also this single topic is directly or indirectly related with international trade, politics, global economics, agriculture, health issues, sustainable development etc. To reduce the carbon emission carbon tax and cap-and-Trade system works as ecient tools. Several countries have adopted any of these or both of the tools in order to diminish the carbon emission in nature. This paper tried to compare dierent aspects of carbon tax and Cap-and-Trade system and application of in dierent countries. The aim of this paper is to analyze pros and cons of the policies and to recommend Canada to chose necessary steps in order to reduce carbon emission.