References 1. German Federal Ministry for the Environment Manual:

Inside economics there is an important concept of externality (Externality), refers to a person's behavior directly affects the well-being of others, but no corresponding obligations or return, also known as external costs, externalities, bounds costs, externalities sector or spillovers emission control area (Spillover Effect). Both positive and negative externalities. "Positive externalities" example is to take care of the ecological health of their own garden, you can also share directly to get relaxed and happy neighbors; but in many cases is "negative externalities" such as high-decibel concerts put clamoring neighbors rest, and then compared the chemical plant waste emissions directly, causing damage emission control area to the surrounding residents, such as health. Damaged objects market operations "negative externalities" is often the environment and ecology. A typical example of "negative externalities" economists talk about is the pollution and greenhouse gases.
Emissions trading is a flexible, in order to "reward" in the form of economic incentives to encourage the participants to achieve the target emissions. emission control area These actors include private companies (such as trading systems in various countries emission control area inside), government departments (such as emissions in the Kyoto Protocol agreement). Functioning trading system, primarily first by a central unit (usually a national government) to set a maximum contaminant emission control area emission limit (cap). Central unit and then assign or sell a specific amount of emissions (that is, emissions emission control area permits / licenses) to private emission control area companies and other organizations. The total emissions of these companies or organizations will not exceed the specified limit. Excessive discharge of pollutants to be discharged if companies and organizations over the license, it is necessary by way of sale and purchase emission control area of other companies or organizations not to excess emissions license, otherwise it will be subject to legal prosecution and prosecution.
References 1. German Federal Ministry for the Environment Manual: "through market competition to protect the climate" "Mehr Klimaschutz durch Wettbewerb" (http://www.bmu.de/files/emissionshandel/downloads/application/pdf/broschuere_emissionshandel.pdf) 2 . Chinese Wikipedia: emissions trading (http://zh.wikipedia.org/wiki/%E6%8E%92%E6%B1%A1%E4%BA%A4%E6%98%93) 3. English Wikipedia : Externality (http://en.wikipedia.org/wiki/Externality)
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