The solution?

It is an enormous challenge – virtually every aspect of modern life contributes greenhouse gases to the atmosphere. The fossil fuel we use to power our homes, offices and vehicles and to produce the food and products we consume, all contribute to the problem.

We need to clean up our energy systems and reduce the amount we consume.

The way we in Europe have chosen to do this is to cap emissions and then create a market in reducing emissions. The theory goes that the cap helps to deliver the outcome we want and the market makes sure investors, companies and ultimately individuals all have an incentive to reduce emissions. The market is in the permits that are created that allow emissions to continue up to the level of the cap.

This cap and trade market in emissions began in the US and was used to successfully cut levels of acid rain causing pollution. Europe has been the quickest to adapt it to the issue of climate change but all over the world countries are developing similar schemes. Even in the US, the country that has been least willing to take serious action on climate change, regional schemes are close to being implemented and legislation is being debated that will create a national scheme.