2. The world carbon trading market can be roughly divided into two categories: one is quota-based trading, namely cap-and-trade.

Trade) "system, purchase those emission reduction quotas that are formulated, allocated (or auctioned) by managers, such as AAU under the Protocol or eua under the EU Emissions Trading System (EU ETS). The other is project-based transactions. Annex I-Countries can purchase emission reduction units (ERUs), certified emission reduction units (CERs) and emission reduction units (RMUs) generated by carbon sinks from other countries listed in Annex I through joint implementation project (d). CERs are certified emission reduction credits generated by clean development mechanism (CDM) projects in developing countries. The transfer or purchase of emission rights will be tracked and recorded through national registration.

1. The cost of reducing greenhouse gases varies greatly among countries in the world. Generally speaking, the cost of emission reduction in developed countries is high and there is a gap, while the cost of emission reduction in developing countries is generally low. Therefore, the Protocol stipulates the Clean Development Mechanism (CDM) to encourage developed countries to provide funds and technology to developing countries to help them build projects to reduce greenhouse gas emissions. After being certified and registered by the country's CDM management department and the United Nations Climate Change CDM Council, it can be used to offset the emissions of developed countries. For example, although China, Indian and other developing countries have no obligation to reduce emissions in the Protocol, they can sell their greenhouse gas reduction targets to countries that have promised to reduce emissions through various channels; For every ton of carbon dioxide equivalent reduced by developing countries, developed countries can gain and deduct one ton of "carbon dioxide emission right".

2. The participation of developed countries in CDM projects is mainly due to cost considerations. Generally speaking, the cost of reducing emissions per ton of carbon dioxide in developed countries is more than four times that of purchasing CDM targets. More importantly, developed countries can also export equipment to developing countries through CDM projects to increase the market share of their products. The emission reduction targets sold by enterprises in developing countries are purchased by international carbon funds or related companies with the participation of the World Bank and other institutions, and enter the markets of developed countries. The World Bank, the Netherlands, Japan, Zurich, Finland, Canada, Britain, Germany, Denmark and Italy currently constitute seven types of buyers.