Emissions trading 101

摘要

Emissions trading schemes, or 'cap and trade' systems, aim to help reduce greenhouse gas emissions by setting an annual emissions target (measured in millions of tonnes). The target is divided up among all the major emitters, who are then issued a number of permits based on their portion of the target. A trading scheme creates a market for the permits, allowing low emitters to sell permits they do not need to high emitters. The trading scheme should encourage companies to lower emissions and turn their unused permits into cash. In theory, those that can easily and cheaply reduce emissions will do so, achieving a reduction in overall pollution at the lowest possible cost to the economy.