2. What has been the experience of the European Union to date with emissions trading? Traders are accustomed to using financial markets for investing in just about everything-ranging from pork bellies to movie production-in the hope of gaining a profit. However, new financial markets for commodities known as carbon credits are not driven by just the profit motive but also by a sense of social responsibility.

The economic incentives of emissions trading (El)

bring together both environmental polluters and green companies in an effort to save the planet and turn a profit.

Here's how it works. Regulators in various countries are setting limits on the amounts of several industrial pollutants that can be released into the atmosphere.

including carbon dioxide (C02), sulphur dioxide, and mercury. A leading example is the European Union's Emissions Trading Scheme (ETS), which was started by the European Commission in 2005 to meet the EU's obligations for carbon reductions in accordance with the Kyoto Protocol on Climate Change. The ETS annually sets a cap for the total amount of C02 emission allowed for each EU country and for each business in that country. The country totals and the EU total cannot exceed the caps.