Carbon emission tradingEmission trading (ETS) for carbon dioxide (CO2) and other greenhouse gases (GHG) is a form of carbon pricing; also known as cap and trade (CAT) or carbon pricing. It is an approach to limit climate change by creating a market with limited allowances for emissions. This can lower competitiveness of fossil fuels and accelerate investments into low carbon sources of energy such as wind power and photovoltaics. Fossil fuels are the main driver for climate change. They account for 89% of all CO2 emissions and 68% of all GHG emissions.
Carbon offsets and creditsA carbon offset is a reduction or removal of emissions of carbon dioxide or other greenhouse gases made in order to compensate for emissions made elsewhere. A carbon credit or offset credit is a transferrable financial instrument (i.e. a derivative of an underlying commodity) certified by governments or independent certification bodies to represent an emission reduction that can then be bought or sold. Both offsets and credits are measured in tonnes of carbon dioxide-equivalent (CO2e).
Personal carbon tradingCarbon rationing, as a means of reducing CO2 emissions to contain climate change, could take any of several forms. One of them, personal carbon trading, is the generic term for a number of proposed emissions trading schemes under which emissions credits would be allocated to adult individuals on a (broadly) equal per capita basis, within national carbon budgets. Individuals then surrender these credits when buying fuel or electricity.
Carbon priceCarbon pricing (or pricing) is a method for nations to address climate change. The cost is applied to greenhouse gas emissions in order to encourage polluters to reduce the combustion of coal, oil and gas – the main driver of climate change. The method is widely agreed and considered to be efficient. Carbon pricing seeks to address the economic problem that emissions of and other greenhouse gases (GHG) are a negative externality – a detrimental product that is not charged for by any market.
Emissions tradingEmissions trading is a market-based approach to controlling pollution by providing economic incentives for reducing the emissions of pollutants. The concept is also known as cap and trade (CAT) or emissions trading scheme (ETS). Carbon emission trading for and other greenhouse gases has been introduced in China, the European Union and other countries as a key tool for climate change mitigation. Other schemes include sulfur dioxide and other pollutants.
Carbon taxA carbon tax is a tax levied on the carbon emissions required to produce goods and services. Carbon taxes are intended to make visible the "hidden" social costs of carbon emissions, which are otherwise felt only in indirect ways like more severe weather events. In this way, they are designed to reduce greenhouse gas emissions by increasing prices of the fossil fuels that emit them when burned. This both decreases demand for goods and services that produce high emissions and incentivizes making them less carbon-intensive.
Carbon budgetA carbon budget is a concept used in climate policy to help set emissions reduction targets in a fair and effective way. It looks at "the maximum amount of cumulative net global anthropogenic carbon dioxide () emissions that would result in limiting global warming to a given level". When expressed relative to the pre-industrial period it is referred to as the total carbon budget, and when expressed from a recent specified date it is referred to as the remaining carbon budget.
Greenhouse gas inventoryGreenhouse gas inventories are emission inventories of greenhouse gas emissions that are developed for a variety of reasons. Scientists use inventories of natural and anthropogenic (human-caused) emissions as tools when developing atmospheric models. Policy makers use inventories to develop strategies and policies for emissions reductions and to track the progress of those policies. Regulatory agencies and corporations also rely on inventories to establish compliance records with allowable emission rates.
Economic sectorOne classical breakdown of economic activity distinguishes three sectors: Primary: involves the retrieval and production of raw-material commodities, such as corn, coal, wood or iron. Miners, farmers and fishermen are all workers in the primary sector. Secondary: involves the transformation of raw or intermediate materials into goods, as in steel into cars, or textiles into clothing. Builders and dressmakers work in the secondary sector. Tertiary: involves the supplying of services to consumers and businesses, such as babysitting, cinemas or banking.
Single marketA single market, sometimes called common market or internal market, is a type of trade bloc in which most trade barriers have been removed (for goods) with some common policies on product regulation, and freedom of movement of the factors of production (capital and labour) and of enterprise and services. The goal is that the movement of capital, labour, goods, and services between the members is as easy as within them. The physical (borders), technical (standards) and fiscal (taxes) barriers among the member states are removed to the maximum extent possible.
