- Emissions Market
With the Kyoto Protocol in force, KRX has since 2015 operated a emissions trading system to reduce greenhouse gas (GHG) emissions, the main culprit behind climate change.
- Based on a “cap-and-trade” principle, the emissions trading scheme allows companies in energy-intensive sectors to emit GHG within a cap, and trade freely-allocated or auctioned permits with other companies. If a company has reduced its GHG emissions, it can either keep the surplus permits for future use or sell them to another company that is short on the permits.
- With costs acting as a key variable, companies may reduce GHG emissions on their own, or buy the permits directly in the market, in order to meet the permissible level of emissions.