ETS: the Emissions Trading Scheme
The ETS, or Emissions Trading Scheme, is a cap and trade mechanism to regulate carbon emissions, promote energy efficiency, and combat global warming. Carbon trading is likely to be a huge financial market in the near future.
An ETS is a market based approach to carbon emissions reduction, where unused emissions permits can be sold (or traded) to businesses which need the permits for their own emissions. An alternative to a market based ETS is a carbon tax, which would simply provide revenue to the government without trading in permits.
A number of countries already have an ETS. Australia is considering its own ETS, which is a highly sensitive issue right now. If it is introduced, the permits are intended to be called Australian Emissions Units, or AEUs.