> For the complete documentation index, see [llms.txt](https://wiki.oikos-international.org/sustainable-finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://wiki.oikos-international.org/sustainable-finance/interviews/lessons/carbon-pricing.md). # Carbon Pricing ### Key information There is a general consensus that carbon pricing is a key strategy that will help lead us to a fully decarbonised economy. It works by putting a price on carbon emissions, companies have a large financial incentive to reduce their emissions. #### How it works The two most common carbon pricing policies are: **Emission Trading System (ETS)** - Companies have emissions units which are tradable, if a company emits less than their units, they can sell the remaining and benefit financially. **Carbon Tax** - Directly sets a price on carbon by setting a specific tax rate on greenhouse gas emissions. ### Our favourite video {% embed url="" %} ### If you want more [How Carbon Pricing Can Save the World - TedX](https://www.youtube.com/watch?v=rg_fP2CZYq4\&t=4s\&ab_channel=TEDxTalks) [How does the emission trading scheme work? - Carbon Control](https://www.youtube.com/watch?v=ReOj12UAus4\&ab_channel=CarbonControl)