Süsinikuturul

Süsinikuturul is an Estonian term that translates to "carbon market." It refers to the system of trading emission allowances, primarily carbon dioxide. The primary purpose of a carbon market is to provide an economic incentive for reducing greenhouse gas emissions. Companies that emit greenhouse gases are allocated or can purchase a limited number of emission allowances. If a company emits less than its allocated allowances, it can sell the surplus on the market. Conversely, if a company exceeds its allowance, it must purchase additional allowances. This mechanism aims to achieve emission reduction targets cost-effectively.

The European Union Emissions Trading System (EU ETS) is a prominent example of a carbon market, and Estonia participates in it. Under the EU ETS, covered sectors, such as power generation and heavy industry, are required to monitor and report their CO2 emissions and surrender allowances corresponding to their emissions. The price of carbon allowances in the market fluctuates based on supply and demand, influenced by factors like economic activity, policy changes, and technological advancements. This price signal guides investment decisions, encouraging businesses to adopt cleaner technologies and practices.

The concept of a carbon market is a key component of many climate change mitigation strategies globally. It allows for flexibility in how emission reduction goals are met, letting the market find the most efficient solutions. While the fundamental principle is straightforward, the design and implementation of carbon markets can be complex, involving various policy considerations and regulatory frameworks.