How is emissions trading defined?
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How is emissions trading defined?
The emission trading system, also known as the emission quota trading system, emission rights trading system, or tradable permit system, refers to a mechanism in which, within a specific area, the total amount of pollutants that can be emitted over a certain period is determined based on the environmental quality requirements of that area. On this basis, emission quotas are allocated through the issuance of permits, and these quotas are allowed to be traded in the market. This system sets a total amount of emissions allowed and allows market forces to determine who uses the emission allowances.
As far as I know, at least it has to be in the same area； For example, Company A has been allocated a total sulfur dioxide emission quota of 601 tons per year by the local environmental protection agency’s department in charge of emission limits ； But normally it would reach over 700 tons ； The total amount of pollutants that Company B is allowed to emit, as determined by the local environmental protection agency’s department in charge of regulating pollutant emissions, is 501 tons per year ； However, Company B underwent technical upgrades ； The annual waste discharge is less than 300 tons ； So, with the approval of companies A and B as well as the local environmental protection authorities ； Company A can spend money to purchase Company B’s surplus quota for sulfur dioxide emissions ；