Whoever emits the greenhouse gas has to pay for it, after all, the general public is harmed.
(Photo: IMAGO/imagebroker)
Cologne Economists are largely in agreement: in the fight against global warming, the pricing of carbon dioxide (CO2) is particularly helpful. Whoever emits the greenhouse gas has to pay for it because the general public is harmed. At the same time, companies and households that avoid CO2 emissions should be rewarded.
Trading in emission certificates provides the incentives for this. Only those who have a permit may emit a ton of CO2.
A company buys the required certificates on the stock exchange or from another company. To ensure that the system serves the climate, the legislator defines an upper limit for CO2 that all emitters may emit overall. The competent authority then successively reduces the number of permits.
In this way, the specified upper limit also decreases, so that the total emissions decrease as desired. Investors can benefit from this development.
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