Carbon Trading

Carbon trading is a market-based mechanism aimed at reducing greenhouse gas emissions. It allows companies to buy and sell permits or credits that represent the right to emit a certain amount of carbon dioxide. The system is designed to provide economic incentives for reducing emissions. Companies that reduce their emissions below their allocated limit can sell their excess permits to others. This creates a financial motivation for companies to invest in cleaner technologies. Carbon trading is a key component of many international efforts to mitigate climate change.