Economics Carbon Trading Questions Medium
The purpose of carbon trading in the context of climate change is to reduce greenhouse gas emissions by creating a market-based mechanism for companies and countries to buy and sell carbon credits. Carbon trading aims to incentivize the reduction of carbon dioxide and other greenhouse gas emissions by assigning a financial value to them. This system allows entities that have exceeded their emission limits to purchase credits from those who have emitted less than their allocated limits. By creating a market for carbon credits, carbon trading encourages the adoption of cleaner technologies and practices, as well as the investment in renewable energy projects. The ultimate goal is to mitigate climate change by reducing overall emissions and promoting sustainable development.