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Global warming sea levels are on the rise the weather is becoming increasingly more extreme and unpredictable species after species face extinction and severe water shortage threatens dry regions all of these are direct consequences of our greenhouse gas emissions and a trend we must stop now tradable carbon units are one of the most effective weapons in the battle for a better environment but what is a carbon unit a carbon unit is a permit to emit one ton of co2 this is equal to the emissions of a one-way flight from Oslo to Bangkok for one person or five months of driving by an average Norwegian motorist so how does the emission trading scheme actually work the emission trading scheme determines how much co2 and other greenhouse gases we can emit in 1997 most of the countries in the world signed the Kyoto Protocol the aim of this agreement is that all industrialized countries should reduce their total emissions of greenhouse gases by at least five percent from 2008 to 2012 compared to their emissions in 1990 the UN distributes quotas of carbon units to those industrialized countries that have signed the treaty these units set a limit on the level of emissions this limit is equivalent to the total amount of co2 that these countries are permitted to emit and which is less than the anticipated emissions some countries are so successful in reducing their emissions that they simply don't need all the carbon units they've been allocated while other countries may struggle to reduce their emissions and need more units countries may therefore buy and sell carbon units the price of tradable units depends on how many there are in circulation similar to a stock exchange prices vary according to supply and demand each country is individually responsible for deciding how to cut its emissions heavy industry is often responsible for a large share of a country co2 emissions many countries have therefore decided that these industries must make the largest contribution towards emission reductions let's look at an example Factory a and B have both been allocated carbon units by their authorities Factory a decides to reduce its emissions by implementing climate-friendly measures their reduction efforts are in fact so successful that they have carbon units to spare these can then be sold Factory B on the other hand is unable to reduce its emissions and has to buy carbon units from factory a friend states however Factory B can also cover its emissions by investing in co2 reducing measures in Factory C which is located in a developing country, although this country does not have any obligations under the Kyoto Protocol the UN can still approve the emission reductions and give factory B carbon units equivalent to the reductions in Factory C so regardless of whether factory B buys units from factory a or C the result is reduced emissions
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