"Carbon emission trading," a scheme that allows market forces to reduce carbon dioxide emissions and tackle climate change, has drawn world-wide attention in recent years.
Many people hope such a scheme, which works through market mechanism, could effectively promote the development of a low carbon economy and hence solve the climate crisis we humans are facing today.
The emissions of greenhouse gases, including carbon dioxide, are not tradable goods as a matter of course. However, the U.N. Framework Convention on Climate Change (UNFCCC) signed in 1992 and the Kyoto Protocol adopted in 1997 provided legal prerequisite for the trading of carbon emissions.
The protocol introduced three flexible mechanisms for the developed countries to reach their emission reduction targets, namely, emissions trading, clean development and joint implementation mechanisms.
According to the UNFCCC and the protocol, the developed countries and developing countries shoulder "common but differentiated responsibilities" for climate change.
Under the convention and the protocol, developed countries would reduce their collective greenhouse emissions by 5.2 percent from 1990 levels during the first five-year commitment period 2008-2012.
Some developed countries, therefore, are setting a cap on total allowable carbon emissions, which means the carbon emission rights become scarce and hence a valuable asset.
Carbon trading could be carried out between different countries around the world as well as between various enterprises within a country, with an ultimate goal of contro