![](/template/termwiki/images/likesmall.jpg)
Home > Terms > English (EN) > Carbon trading
Carbon trading
Carbon emissions trading also called Cap & trade 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. Emissions trading or cap and trade is a market-based approach used to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants.
A central authority (usually a governmental body) sets a limit or cap on the amount of a pollutant that may be emitted. The limit or cap is allocated or sold to firms in the form of emissions permits which represent the right to emit or discharge a specific volume of the specified pollutant. Firms are required to hold a number of permits (or allowances or carbon credits) equivalent to their emissions. The total number of permits cannot exceed the cap, limiting total emissions to that level. Firms that need to increase their volume of emissions must buy permits from those who require fewer permits.
The transfer of permits is referred to as a trade. In effect, the buyer is paying a charge for polluting, while the seller is being rewarded for having reduced emissions. Thus, in theory, those who can reduce emissions most cheaply will do so, achieving the pollution reduction at the lowest cost to society.
- Part of Speech: proper noun
- Synonym(s):
- Blossary: Our Planet-our environment
- Industry/Domain: Environment
- Category: Pollution
- Company:
- Product:
- Acronym-Abbreviation:
Other Languages:
Member comments
Terms in the News
Billy Morgan
Sports; Snowboarding
The British snowboarder Billy Morgan has landed the sport’s first ever 1800 quadruple cork. The rider, who represented Great Britain in the 2014 Winter Olympics in Sochi, was in Livigno, Italy, when he achieved the man-oeuvre. It involves flipping four times, while body also spins with five complete rotations on a sideways or downward-facing axis. The trick ...
Marzieh Afkham
Broadcasting & receiving; News
Marzieh Afkham, who is the country’s first foreign ministry spokeswoman, will head a mission in east Asia, the state news agency reported. It is not clear to which country she will be posted as her appointment has yet to be announced officially. Afkham will only be the second female ambassador Iran has had. Under the last shah’s rule, Mehrangiz Dolatshahi, a ...
Weekly Packet
Language; Online services; Slang; Internet
Weekly Packet or "Paquete Semanal" as it is known in Cuba is a term used by Cubans to describe the information that is gathered from the internet outside of Cuba and saved onto hard drives to be transported into Cuba itself. Weekly Packets are then sold to Cuban's without internet access, allowing them to obtain information just days - and sometimes hours - after it ...
Asian Infrastructure Investment Bank (AIIB)
Banking; Investment banking
The Asian Infrastructure Investment Bank (AIIB) is an international financial institution established to address the need in Asia for infrastructure development. According to the Asian Development Bank, Asia needs $800 billion each year for roads, ports, power plants or other infrastructure projects before 2020. Originally proposed by China in 2013, a signing ...
Spartan
Online services; Internet
Spartan is the codename given to the new Microsoft Windows 10 browser that will replace Microsoft Windows Internet Explorer. The new browser will be built from the ground up and disregard any code from the IE platform. It has a new rendering engine that is built to be compatible with how the web is written today. The name Spartan is named after the ...
Featured Terms
Manganese Steels
Manganese in the range of 1.65 to 2 percent is added to improve tensile strength,hardness,harden ability and hot workability of steel.Manganese steel ...
Contributor
Featured blossaries
architected
0
Terms
27
Blossaries
14
Followers
The North Face 2015 Collection
![](/template/termwiki/images/likesmall.jpg)
Browers Terms By Category
- General Finance(7677)
- Funds(1299)
- Commodity exchange(874)
- Private equity(515)
- Accountancy(421)
- Real estate investment(192)
Financial services(11765) Terms
- General law(5868)
- Courts(823)
- Patent & trademark(449)
- DNA forensics(434)
- Family law(220)
- Legal aid (criminal)(82)
Legal services(8095) Terms
- Meteorology(9063)
- General weather(899)
- Atmospheric chemistry(558)
- Wind(46)
- Clouds(40)
- Storms(37)
Weather(10671) Terms
- Bread(293)
- Cookies(91)
- Pastries(81)
- Cakes(69)
Baked goods(534) Terms
- Hand tools(59)
- Garden tools(45)
- General tools(10)
- Construction tools(2)
- Paint brush(1)