Carbon trading is a system that caps the amount of carbon dioxide, the main greenhouse gas, that companies may emit each year. Companies exceeding their quota can buy extra certificates from those companies that succeeded in shrinking their carbon footprint by adopting environmentally friendly technology or modifying production in other ways.
The system is the main tool used by the European Union to meet its ambitious pollution-reduction goals.
Many economists say trading provides the most economically efficient way to reduce pollution. They point out that environmental markets elsewhere in the world, including in the United States, have succeeded in bringing down levels of sulfur dioxide emissions, which cause acid rain.
Last week, the European Commission emphasized that the attack would not set back its plans to include international airlines in the system beginning in 2012, and it vowed to impose “high-security standards in its legislation to prepare for the inclusion of the aviation sector” in the system.
This is relevant to a data on the 'true cost of flying' we'll be doing later on in class!
See Fraud Besets E.U. Carbon Trade System