What is the emission trading system?

emissions apply to pollution that is released into the air. The emission trading system concerns a program that provides flexibility and liability in cases where emission limits have been set. This is done by issuing credits to polluters that can be traded among those who produce less pollution and those who produce more. Those who signed this agreement are usually referred to as signatories. With the birth of this Agreement, the concept known as the emissions trading system was born. The agreement was designed to manage the levels of emissions by issuing assigned units (AUA) to signatories. The emissions trading system has been designed to allow countries to benefit from less AUAs than allocated. They could benefit from the sale of AAUS surplus to those countries that needed more than they were assigned. If the country's emissions exceed their AUA, they would have to buy credits. This can therefore be considered as an additional cost as exceeding the limit.

In many cases, emissions trading system is referred to as the carbon market. This is because carbon dioxide is one of the gases that is most emitted and may be most difficult to reduce. Therefore, the exchange of carbon dioxide credits prevailed.

There are other types of units that are issued and which can be replaced. For example, there is a certified emission reduction program (CER). Credits can be obtained through this program when a signatory develops a project to reduce emissions in a developing country. TKREDITY, which are earned, can be sold or can be used to extend the owner's emission limits.

emissions trading system is not always international. The European Union (EU) has developed a trading system of greenhouse gas emissions of the European Union (EU ETS). This system has been developed to allow trading between different sectors of different EU Member States.

Kyoto protocol also allows you to develop a systemEmissing trading at national level. This can be achieved if the national AUA is divided among the main polluters of the nation. This will give these parties individual emission limits. If the entity has an excess AUA, it can be sold to those national entities that have exceeded their limits or can be sold back to national authorities.