SO2 emission trading system

The SO2 emission trading system is a market-based approach to reduce sulfur dioxide pollution, primarily from power plants. Authorities set a cap on total SO2 emissions and issue allowances, each representing the right to emit a certain amount. Companies can buy and sell these allowances, incentivizing them to reduce emissions efficiently. If a company reduces its emissions below its allowance, it can sell the surplus; if it needs to emit more, it must buy additional allowances. This system encourages cost-effective pollution reduction and helps meet environmental goals while allowing flexibility for companies.