Emissions Trading
Emissions trading, often referred to as cap-and-trade, is an environmental policy tool that allows countries or companies to buy and sell permits to emit a certain amount of greenhouse gases. Each participant receives a limit on emissions, and if they emit less, they can sell their extra permits to others who exceed their limits. This creates a financial incentive to reduce pollution, as companies can profit by lowering emissions. The overall goal is to reduce total emissions in a cost-effective way while encouraging innovation in cleaner technologies.
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Emissions trading is a market-based approach to controlling pollution by allowing companies to buy and sell permits for emitting a certain amount of greenhouse gases. Each permit allows a specific amount of emissions, and companies that reduce their emissions below their allowance can sell their extra permits to others that need more. This creates a financial incentive for companies to lower their emissions, as they can profit from selling unused permits. Overall, emissions trading aims to reduce pollution efficiently while promoting economic flexibility and innovation in reducing environmental impacts.