Fixing the
Carbon Trading Scheme
So you think Carbon Trading is dead? Think again!
The beautiful market based emissions trading system is evolving and reforming year by year and is now spreading right across the globe. After Europe dived into the water first with its imaginatively named Emissions Trading System(ETS) in 2005, there were many haters and critics. But 10 years on the, the ETS is bigger and better and similar concepts now cover 12% of global carbon emissions and counting.
But wait! What are these carbon trading or cap and trade schemes? The carbon trading or cap and trade schemes are launched by governments who create pollution permits for every tonne of greenhouse gases they will allow to be emitted. These permits are dished out to energy intensive companies who use them to have the right to pollute our planet and make their products. A more energy effecient firm will have permits to spare, so it trades them to other companies for some cash. As firms realise they can get rich quick by selling spare permits, they invest in more energy effecient technology. Watch the video to see it in animation: