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Economics

The Economics of Tradeable Emissions Permits in Climate Policy

Quick fact

The European Union’s Emissions Trading System (EU ETS) is the world’s largest carbon market, covering around 40% of EU emissions, and its price per tonne of CO2 has ranged from near zero to over €100.

Why this is interesting

Imagine if polluting were a privilege you had to pay for—but the price isn’t set by a government, it’s set by the market. That’s the revolutionary idea behind tradeable emissions permits.