emissions trading

Quick Reference

A general term for the flexibility mechanisms that were agreed under the Kyoto Protocol and are designed to reduce emissions of greenhouse gases. It is a market‐based system that allows polluters the flexibility to select cost‐effective solutions to achieve the agreed emission goals, in which polluters that produce fewer emissions than they are allowed can sell or trade their excess capacity to others who do not, within the bubble in which total approved emissions cannot be exceeded. See emissions auctioning, grandfathering, international emissions trading.

Subjects: Environmental Science.

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