Carbon markets
The concept of carbon markets was introduced by the Kyoto Protocol, which established three market mechanisms – International Emissions Trading (IET), Joint Implementation, and Clean Development Mechanism – to reduce emissions. The objective of a carbon market is to provide economic incentives for companies to reduce their emissions, as they can sell unused emissions allowances to other companies. Carbon markets, such as cap-and-trade systems or carbon taxes, can take various forms. Still, the underlying principle is to utilise market forces to lower greenhouse gas emissions and address climate change.
