Emission Trading Systems

Emission Trading Systems (ETS) are market-based approaches aimed at reducing greenhouse gas emissions. Governments set a cap on total emissions and issue permits to companies, allowing them to emit a specific amount of pollution. Companies that reduce their emissions can sell their extra permits to others that need more, creating a financial incentive to cut pollution. This system encourages innovation and cost-effectiveness in reducing emissions while maintaining economic efficiency. Ultimately, the goal is to limit overall emissions and combat climate change while allowing businesses the flexibility to meet their targets.