Economics · Emissions Trading System
What is the primary operational mechanism of an Emissions Trading System (ETS) designed to incentivize overall emission reductions?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Mandating a minimum share of non-fossil energy consumption for designated industrial consumers.
- 2Levying a tax on imported goods from nations that do not have carbon pricing mechanisms.
- 3Applying a direct tax on the carbon content of fossil fuels to increase the cost of carbon-intensive goods.
- 4Setting a limit on total emissions and allowing entities to sell their unused emission permits.✓
Correct answer
Setting a limit on total emissions and allowing entities to sell their unused emission permits.
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