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Environmental Science

Economics of Carbon Trading Mechanisms

Quick fact

The European Union Emissions Trading System (EU ETS) is the world's largest carbon market, covering about 40% of EU greenhouse gas emissions.

Why this is interesting

Imagine a company can buy the right to pollute—just like buying a concert ticket. But what if those tickets could be traded, and the price fluctuates based on supply and demand? That's the core idea behind carbon trading.