2) Readings Carbon Markets 101 pp 1-11 https://carbonmarketwatch.org/wp-content/uploads/2019/06/CMW-CARBON-MARKETS-101-THE-ULTIMATE-GUIDE-TO-MARKET-BASED-CLIMATE-MECHANISMS-WEB-FINAL-SINGLE-1.pdf...

Running Head: CARBON MARKETS        1
CARBON MARKETS        6
CARBON MARKETS
Table of Contents
Introduction    3
Difference between Cap and Trade and Offset System    3
"Trading" Emissions    3
Potential Issues with Carbon Markets    4
Reasons for Introducing Carbon Markets and They Being Bad Idea Gone Wrong    4
How Carbon Markets Increase Climate Pollution, Serve Big Countries and Firms as well as Avoid Climate Commitments    5
If Free Markets and Capitalism can Save Us    5
Conclusion    6
References    7
Introduction
Carbon markets were developed with the aim of reducing emissions in the environment so that an individual can live healthy life. Healthy life means fresh air and no risk to our planet Earth. It was done so that the climate does not change frequently.
Difference between Cap and Trade and Offset System
The cap and trade are used in reducing emissions of greenhouse gases such as methane, nitrous oxide, carbon dioxide that leads to global warming. As mentioned by Schmalensee and Stavins (2017), the cap is a limit put on the firm for controlling pollution. It is made up of allowances that permit the firm to emit a specified amount of pollution. Trading refers to buying and selling allowances wherever they fit. It is beneficial for both trading companies and compliance is achieved at a lower cost than without trading.
On the other hand, a carbon offset is concerned with the reduction in emissions of greenhouse gases done to compensate for emissions made elsewhere. It allows companies and citizens to invest in environmental projects around the world to balance carbon footprint. For example, people may purchase carbon offsets to compensate for the harmful gasses emissions caused by personal air travel.
"Trading" Emissions
It is concerned with the trading of units, which funds projects that help in reducing emissions from the atmosphere such as renewable energy, reforestation programs. The organizer establishes auction rules and then the seller estimates the supply volume of emission permit and buyer estimate the demand (Climate Justice Demands, 2015).
The submission of bid price along with supply and demand volume helps in determining the winner. The one who wins who win the auctions has trade emission permits. It is a cost-effective way to reduce the harmful effect of greenhouse gases in the...