With climate change now an increasingly important concern for policy-makers, carbon trading is riding high on the agenda.
What is the idea behind carbon trading?
Carbon trading is a market mechanism that derives from the Kyoto Protocol as a means to tackle global warming.
Under the Kyoto treaty - which came into force in February 2005 - industrialised countries must reduce total greenhouse gas emissions by an average 5.2% compared with 1990 levels between 2008-2012.
The most important greenhouse gas contributing to global warming is carbon dioxide, which is mainly emitted by burning fossil fuels. Under Kyoto, each participating government has its own national target for reducing carbon dioxide emissions.
Other reduction initiatives, (deriving from but not part of Kyoto), include company-based schemes, which also have specific targets.
The key idea behind carbon trading is that, from the planet's point of view, where carbon dioxide comes from is far less important than total amounts.
