Carbon Trading

Carbon trading is a market-based approach to controlling pollution by providing economic incentives for reducing carbon dioxide emissions. In this system, companies are given a limit (or cap) on their emissions. If they emit less than their cap, they can sell their excess permits to other companies that exceed their limits. This creates a financial incentive for companies to reduce emissions, as those who reduce more can profit from selling their permits. Overall, carbon trading aims to encourage environmentally friendly practices while allowing businesses the flexibility to operate within a regulated emissions framework.