Emission trading is a market-based system that allows entities the flexibility to select cost-effective solutions to achieve established environmental goals (e.g. an emission ceiling).
By means of this mechanism, and in the framework of the UNFCCC and the Kyoto Protocol, Annex-I countries may sell or buy AAUs / RMUs / CERs / ERUs to or from another Annex-I country.
One of the most popular emission trading mechanism is the European Emissions Trading Scheme (EU-ETS) developed by the EU in 2003.
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