Carbon emissions trading 碳排放权交易

Carbon emissions trading 碳排放权交易

Carbon emissions trading is a mechanism that seeks to control air pollution and greenhouse gases using a market-oriented approach that gives companies economic incentives to reduce their emissions. Under the mechanism, a government imposes a limit on the total amount of pollutants that can be emitted. It then requires companies to get a permit that corresponds to the type and amount of pollutants they are allowed to discharge. The permits can be transferred or sold, a process that in effect rewards companies that emit less than they are allowed to and punishes those exceeding their quotas. This is also sometimes referred to as a “cap and trade” mechanism. It can be implemented within a country or across borders. China started experimenting with carbon emissions trading in 2012 and has allowed seven provinces and cities to run a pilot program in the hopes of rolling it out nationwide.