0 a system for controlling pollution. Companies and governments can buy or sell licences to produce carbon dioxide.
1 a system for buying and selling the right to release carbon dioxide into the environment. Companies or countries agree a limit on the amount of carbon dioxide that can be produced, then can buy the right to produce more than this from companies or countries that produce less:
Carbon trading and setting caps are not all negatives in respect of their impact on industry.
At the time, the scheme was a novel economic approach, being the first multi-industry carbon trading system in the world.
It is also necessary to expand the carbon trading market in order to send clear signals about the cost of carbon.
They are also introducing carbon trading now; they are finding out exactly how to do it.
There are negotiated agreements on energy use and it is possible that carbon trading regimes may be established.
Applying such principles at the level of individuals via a system of personal carbon trading could be an extremely effective way of influencing consumer behaviour.
However, the importance attributed to so-called market solutions, and to carbon trading in particular, is indisputable.
At the heart of our new framework for energy policy will be a carbon trading system.
