Carbon Trading System

Definition

A carbon trading system is a market-based approach to reduce greenhouse gas emissions. It allows companies or countries to buy and sell permits that represent the right to emit a certain amount of carbon dioxide or other greenhouse gases.

Related terms

Paris Agreement:

An international treaty signed by almost every country in the world, aiming to combat climate change by limiting global warming to well below 2 degrees Celsius above pre-industrial levels.

United Nations Framework Convention on Climate Change (UNFCCC): An international environmental treaty that provides the overall framework for intergovernmental efforts to tackle climate change, including negotiations and agreements like the Paris Agreement.

Emission Permits: Certificates issued by governments or regulatory bodies that allow companies or countries to emit a specific amount of greenhouse gases.