Carbon trading schemes are emerging all over the world as governments try to meet greenhouse gas emissions reduction targets in the fight against climate change.
Under cap-and-trade schemes, companies or countries face a carbon limit. If they exceed the limit they can buy allowances from others. They can also buy carbon offsets from outside projects which avoid emissions, often from developing countries.
Australia domestic emissions reduction scheme. Launched: July 2012. Target: Part of plans to cut emissions by 5 per cent by 2020. 300 of the biggest polluters, from coal plants to smelters, initially pay $23 per tonne of CO2 emitted. They are banned from using UN carbon offsets until the system is replaced by a nationwide carbon trading scheme in July 2015 but can use a limited number of domestic credits. The EU has agreed to link its ETS with Australia's scheme by 2018.