Economics Carbon Trading Questions
Carbon trading can have a positive impact on the transition to a low-carbon economy by providing economic incentives for businesses and industries to reduce their carbon emissions. It creates a market for carbon credits, which can be bought and sold, allowing companies that have reduced their emissions below their allocated limit to sell their excess credits to those who have exceeded their limit. This system encourages companies to invest in cleaner technologies and practices to reduce their emissions in order to generate additional revenue from selling their credits. As a result, carbon trading helps to drive innovation, promote the adoption of low-carbon technologies, and ultimately contribute to the overall reduction of greenhouse gas emissions in the economy.