(Phnom Penh): A Carbon Market is a trading system through which countries can buy or sell greenhouse gas emission allowances in an effort to meet national emission limits under the Kyoto Protocol or other agreements, such as those within the European Union.

The term is used because carbon dioxide (CO2) is the most prevalent greenhouse gas, and all other gases are measured in units of carbon dioxide equivalent (CO2e).

In simple terms, the carbon market is a system designed to reduce greenhouse gas emissions, which are the primary cause of climate change. Governments or international organisations set limits on the amount of emissions that companies or industries can produce. Within this system, companies can buy and sell carbon credits, which represent the right to emit a specific amount of carbon dioxide.

1-Cap-and-Trade System
One type of carbon market is known as the "Cap-and-Trade" system. In this framework, authorities set an overall limit (Cap) on emissions for each industry:

-If a company reduces its pollution more effectively than the set limit, it can "sell" its surplus allowances to other companies.

-If a company exceeds its emission limit, it must "buy" additional allowances from the market. This mechanism creates a financial incentive, encouraging companies to invest in clean technologies to save money.

2-Voluntary Carbon Markets
Beyond legally mandated mechanisms, companies or individuals can also participate in voluntary markets to offset their emissions:

-These carbon credits are generated from "green" projects, such as reforestation, renewable energy, or methane gas capture.

-Purchasing these credits provides direct financing to environmental protection projects around the world.

Conclusion
The ultimate goal of the carbon market is to ensure that "pollution has a price." When emitting carbon becomes a financial burden, businesses will shift toward energy-efficient practices.

The carbon market is a vital economic tool for addressing climate change. By merging environmental goals with market mechanisms, it encourages businesses and governments to work together toward a sustainable, low-carbon future.
=FRESH NEWS