A system allowing the trade of emission reduction credits, to facilitate compliance with emissions allowances at least cost.

A provision in the Kyoto Protocol that allows countries with legally binding targets to trade emission entitlements with another country.

A market-based approach that seeks to minimize the cost of achieving environmental objectives. In an emissions trading system, participants are given emission limits and those who manage to reduce their emissions below this level are allowed to sell their surplus allowances to others for whom cutting emissions is excessively expensive.. While the overall target remains intact, trading allows the lowest cost options to be discovered. Trading can occur at the intracompany, domestic, and international levels. The IPCC Second Assessment Report adopted the convention of using “permits” for domestic trading systems and “quotas” for international trading systems. Back up

Some countries have proposed that emissions trading be allowed among Parties with emissions commitments In order to improve the overall flexibility and economic efficiency of making emissions cuts.

A mechanism under the Kyoto Protocol through which parties with emissions commitments may trade units of their emissions allowances with other parties. The aim is to improve the overall flexibility and economic efficiency of making emissions cuts.

Trading of emission allowances between parties with emission commitments. Emissions trading Units are called Assigned Allowance Unit (assigned at the national level, based on an Annex 1 countries reduction commitment under Annex B of the KP)

The Kyoto Protocol allows Parties listed in Annex B to participate in trading of their assigned amounts for the purposes of fulfilling their emissions commitments. Parties buying parts of assigned amounts can add these to their assigned amounts under the Protocol, while Parties selling must deduct them. Such trading must be supplemental to domestic actions. The COP is to define the rules and modalities for trading.

a system that would allow countries that have committed to targets to "buy" or "sell" emissions permits among themselves. Emissions trading is included in the Kyoto Protocol. It provides participating parties with the opportunity to reduce emissions where it is most cost-effective to do so. (See also Kyoto Protocol.)

The Kyoto Protocol establishes a mechanism whereby Parties with emissions commitments may trade their emission allowances with other Parties. The aim is to improve the overall flexibility and economic efficiency of making emissions cuts.

A tool for reducing emissions of greenhouse gases. Sources of a particular pollutant (most often carbon dioxide) are given permits to release a specified number of tons of the pollutant. A government or trading agency issues only a limited amount of permits consistent with the desired level of emissions. The owners of the permits may keep them and release the pollutants, or reduce their emissions and sell the permits. The fact that permits have a value and can be sold or traded gives owners an incentive to reduce emissions. In 1997, the Kyoto Protocol included emissions trading as a means of controlling greenhouse gases.

A mechanism for reducing greenhouse gas emissions, proposed in the 1997 Kyoto Protocol. Emitters of a particular pollutant (most often carbon dioxide) are given permits to release a specified number of tons of the pollutant. These permits are issued by governments or trading agencies, in limited quantities corresponding to the desired level of emissions. Permit owners may keep them and release the pollutants, or reduce their emissions accordingly and sell the permits. The fact that permits have a value and can be sold or traded gives owners an incentive to reduce emissions.

Pollutant emissions that are treated as a commodity and have a price assigned based on an emissions cap auction or other tool.

Using market mechanisms to reduce carbon or other emissions in aggregate, by allowing those who produce less than their allotted amount to sell 'credits' to those who will exceed their permitted emissions. The carbon emissions trading scheme set up through the Kyoto Protocol began operation in the EU in February 2005. Sulphur dioxide trading has been happening in the US for years and some US companies have now formed their own mini-exchange to trade a range of emissions.

one method cited for controlling harmful greenhouse gases. The gases, produced mainly by the burning of fossil fuels to generate energy, are blamed by many scientists for causing a dangerous warming of the global climate. Emissions trading allows a business to buy and sell permits allowing them to emit the gases within a declining overall limit. Energy-efficient businesses can sell their unused permits to the less efficient, thus providing a financial reward for environmental virtue.

A system in which a regulatory agency specifies an overall level of pollution that will be tolerated (a cap) and then uses allowances to develop a market to allocate the pollution among sources of pollution under the cap. Emissions permits or allowances become the currency of the market, as pollution sources are free to buy, sell, or otherwise trade permits based on their own marginal costs of control and the price of the permits. In no case can total emissions exceed the cap. (Source: Adapted from U.S. Energy Information Administration)

Mechanism under the Kyoto Protocol where countries with emission commitments may trade emission allowances with other parties. It is a market-based approach to competitively reduce pollution loads.

One of the Kyoto Protocol's flexibility mechanisms to allow the transfer between Annex B countries of parts of their assigned amounts of emissions. Emissions trading must be "supplemental to domestic actions." ()

A market mechanism that allows emitters (countries, companies or facilities) to buy emissions from or sell emissions to other emitters.  Emissions trading is expected to bring down the costs of meeting emission targets by allowing those who can achieve reductions less expensively to sell excess reductions (e.g. reductions in excess of those required under some regulation) to those for whom achieving reductions is more costly.

A market-based approach to achieving the environmental protection goals defined by the Kyoto Protocol. This approach allows countries that reduce their greenhouse gas emissions further than required to trade their excess certificates to offset emissions from other sources within or outside the country. Trading can take place at national or international level, or between companies. Emissions trading in Europe began on January 1, 2005, and is regulated by an EU directive. Companies receive a certain amount of certificates, which is reduced from period to period. Companies that have already made significant climate protection efforts or have shown themselves to be particularly innovative can sell their excess certificates, thus receiving an additional source of income. Heavy polluters must make extra efforts or buy in allowances to fulfill their obligations; those that do not fulfill them must pay a penalty. In this way, the reductions in emissions are made where the costs of reduction are lowest. The efficiency of climate protection is increased and the achievement of the ecological goal ensured.

The creation of surplus emission reductions at certain stacks, vents, or similar emissions sources and the use of this surplus to meet or redefine pollution requirements applicable to other emission sources. This allows one source to increase emissions when another source reduces them, maintaining an overall constant emission level. Facilities that reduce emissions substantially may “bank” their “credits” or sell them to other industries.

Emissions trading (or cap and trade) is an administrative approach used to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants http://www.defra.gov.uk/Environment/climatechange/trading/index.htm. In such a plan, a central authority (usually a government agency) sets a limit or cap on the amount of a pollutant that can be emitted. Companies or other groups that emit the pollutant are given credits or allowances which represent the right to emit a specific amount.