International Emissions Trading

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International Emissions Trading is a market-based climate policy mechanism that allows countries or entities with surplus greenhouse gas emission allowances to sell them to those exceeding their emission limits, thereby promoting cost-effective global emissions reductions.

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Statements (48)

Predicate Object
instanceOf carbon market mechanism
environmental policy instrument
market-based climate policy mechanism
aimsTo equalize marginal abatement costs across participants
minimize overall cost of meeting emission reduction targets
allows countries exceeding their emission limits to buy allowances
countries with surplus emission allowances to sell them
associatedWith Article 17 of the Kyoto Protocol NERFINISHED
canInclude linking of national or regional emissions trading systems
canLeadTo carbon leakage concerns if poorly designed
complements Clean Development Mechanism NERFINISHED
Joint Implementation NERFINISHED
contrastedWith carbon taxes
command-and-control regulation
covers carbon dioxide
fluorinated gases
methane
nitrous oxide
creates price signal for emissions reductions
criticizedFor complexity of rules
market volatility
potential overallocation of allowances
dependsOn credible enforcement of emission limits
robust emissions accounting rules
encourages emissions abatement where it is cheapest
evolvedUnder United Nations Framework Convention on Climate Change NERFINISHED
governedBy international climate agreements
hasBasisIn cap-and-trade principle
hasPurpose promote cost-effective global greenhouse gas emissions reductions
implementedUnder Kyoto Protocol NERFINISHED
influenced European Union Emissions Trading System NERFINISHED
design of regional emissions trading systems
involves countries
regulated entities
trading of greenhouse gas emission allowances
isComponentOf Kyoto flexible mechanisms
international carbon market
operatesAt international level
relatesTo carbon pricing
climate change mitigation
greenhouse gas emissions
requires international cooperation
monitoring reporting and verification of emissions
national emissions caps
national registries for emission units
subjectTo negotiation in international climate talks
usesUnit AAUs
Assigned Amount Units NERFINISHED

Referenced by (1)

Full triples — surface form annotated when it differs from this entity's canonical label.

Kyoto Protocol establishesMechanism International Emissions Trading