Emissions trading
![A coal power plant in Germany. Due to emissions trading, coal may become a less competitive fuel than other options.](/Images/godic/202501/03/Coal_power_plant_Datteln_2_Crop10306.png")
![](/Images/godic/202501/03/Storck_Harbour_scene0306.jpg")
![Example MACs for two different countries](/Images/godic/202501/03/Emissions.Trading0306.jpeg")
![New Zealand Unit Prices 2010 to 2015](/Images/godic/202501/03/NZU-NZ-emission-unit-720by540.svg0306.png")
Emissions trading or cap and trade is a government-mandated, market-based approach to controlling pollution by providing economic incentives for achieving reductions in the emissions of pollutants. Various countries, states and groups of companies have adopted such trading systems, notably for mitigating climate change.