Carbon emission trading
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Carbon emissions trading is a form of emissions trading that specifically targets carbon dioxide (calculated in tonnes of carbon dioxide equivalent or tCO2e) and it currently constitutes the bulk of emissions trading.
This form of permit trading is a common method countries utilize in order to meet their obligations specified by the Kyoto Protocol; namely the reduction of carbon emissions in an attempt to reduce (mitigate) future climate change.
Under Carbon trading, a country having more emissions of carbon is able to purchase the right to emit more and the country having less emission sells the right to emit carbon to other countries. The countries emitting more carbon thereby satisfy their carbon emission requirements, and the trading market results in the most cost-effective carbon reduction methods being exploited first. For any given expenditure on carbon reduction, the market mechanism will result in the greatest reduction.
See also
- European Union Emission Trading Scheme
- Low carbon power generation
- New South Wales Greenhouse Gas Abatement Scheme
- Personal carbon trading
- Carbon offset
- Carbon project