The term "carbon price" refers to a fee or tax imposed on activities that release carbon dioxide (CO2) into the atmosphere, such as burning fossil fuels. The purpose of this pricing mechanism is to incentivize businesses and individuals to reduce their CO2 emissions by making it more expensive to pollute. By increasing the cost of emitting greenhouse gases, a carbon price encourages the transition towards cleaner energy sources and more sustainable practices, ultimately helping to mitigate climate change.