Advantages and Disadvantages

Reducing emissions and lowering energy consumption usually brings vast benefit at the core business. For example, in 2001 a British energy company named BP reported that they were able to save about $650 million by implementing a simple cup-and-trade scheme. Companies in different industries also face dramatically different costs in lowering their emissions.

Carbon trading also has its own drawbacks which easily affect a fast-growing and unregulated market. As with any financial market, emissions traders are vulnerable to significant risk and volatility which is a major disadvantage of emission trading.

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