Carbon Cut and Swap: Is Trading Emissions the Green Magic Bullet?
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Abstract
This study assesses the efficacy of carbon emissions trading mechanisms in mitigating the release of carbon emissions. through a combination of literature review and empirical research. Findings indicate that while carbon trading can reduce emissions to some extent, its efficacy varies widely based on factors like quota setting, market participant behavior, and policy implementation. The study also explores the application of carbon trading in different regions, revealing varied effectiveness, with Europe showing better results than some emerging economies. Additionally, the paper addresses challenges such as market fluctuations, risks, and potential abuse by companies or countries, emphasizing the need for policy measures to ensure fair and effective market operation. In conclusion, the research suggests that while the carbon trading mechanism has some effectiveness, improvements are necessary to address existing challenges and enhance its role in reducing carbon emissions.
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