1. Determination of emission limits: The government sets corresponding carbon emission limits for various industries or enterprises according to national or regional emission reduction targets. These limits are usually expressed in tons of carbon dioxide equivalent (tCO2e).
2. Allocating carbon emission quotas: The government allocates carbon emission quotas to relevant enterprises or individuals according to the set emission quotas. Quotas can be allocated through free distribution, auction or a combination of the two.
3. Establish a trading mechanism: the government or independent trading institutions establish a carbon emission trading market, provide trading places, formulate trading rules, and monitor and supervise trading activities.
4. Transaction process: Enterprises or individuals participating in the transaction can buy and sell carbon emission quotas in the market according to their own needs. When the actual emission of an enterprise is lower than its quota, it can sell the remaining quota; When the actual emission is higher than the quota, it is necessary to buy additional quotas in the market.
5. Fulfillment and settlement: Enterprises or individuals need to submit their carbon emission quota holdings and actual emissions to the government within the specified time. If the actual emissions exceed the quota, you need to pay a fine or accept other penalties.
It should be noted that the implementation effect of carbon emission trading mechanism is influenced by a series of factors such as policy design, market participation and trading supervision. In order to ensure the effectiveness and fairness of the trading mechanism, the government needs to formulate corresponding policies and regulatory measures to promote the development of carbon emission index trading.