[Answer] What is emissions trading?

Answer: Emissions trading is a market-based approach to controlling pollution.
What is emissions trading?

European Union Emission Trading Scheme – Wikipedia

Carbon emission trading – Wikipedia

Carbon emission trading – Wikipedia

Chinese national carbon trading scheme – Wikipedia

Emissions trading (also known as cap and trade emissions trading scheme or ETS) is a market-based approach to controlling pollution by providing economic incentives for reducing the emissions of pollutants. A central authority (usually a governmental body) allocates or sells a limited number of permits that allow a discharge of a specific quantity of a specific pollutant over a set time period. Pollut…

Emissions trading (also known as cap and trade emissions trading scheme or ETS) is a market-based approach to controlling pollution by providing economic incentives for reducing the emissions of pollutants. A central authority (usually a governmental body) allocates or sells a limited number of permits that allow a discharge of a specific quantity of a specific pollutant over a set time period. Polluters are required to hold permits in amount equal to their emissions. Polluters that want to increase their emissions must buy permits from others willing to sell them. Financial derivatives of permits can also be traded on secondary markets. Cap and trade (CAT) programs are a type of flexible environmental regulation that allows organizations and markets to decide how best to meet policy targets. This is in contrast to command-and-control environmental regulations (such as best available technology (BAT) standards and government subsidies). A 2020 study found that the European Union Emissions Trading System successfully reduced CO2 emissions even though the prices for carbon were set at low prices.

Current status Various countries states and groups of companies have adopted such trading systems notably for mitigating climate change .

Current status Various countries states and groups of companies have adopted such trading systems notably for mitigating climate change . There are active trading programs in several air pollutants . For greenhouse gases which cause climate change permit units are often called carbon credits . The largest greenhouse gases (GHG) trading program is the European Union Emission Trading Scheme which trades primarily in European Union Allowances (EUAs); the Californian scheme trades in California Carbon Allowances and the New Zealand Emissions Trading Scheme in New Zealand Units (NZUs). The United States has a national market to reduce acid rain and several regional markets in nitrogen oxides . Recent reduction in California’s GHG emissions are not attributed to carbon trading but to other factors such as renewable portfolio standards and…

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