Why is emission trading receiving so much attention for reducing greenhouse gas emissions?
• Emission trading is the most economically efficient mechanism to reduce emissions as it allows sources with cheap abatement opportunities to sell these reduction to other sources facing much higher abatement costs. Hence it is a win-win trade. The gains from emissions trading are biggest when inclusion of reduction opportunities is as wide as feasible to allow a range of abatement costs, and when trading is transparent and simple to reduce transaction costs.
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- Why is emission trading receiving so much attention for reducing greenhouse gas emissions?
