A patchwork of emissions trading systems (ETSs) currently operate in several jurisdictions, including the EU, Switzerland, South Korea and several US states and Canadian provinces.

Market mechanisms are increasingly being considered as a tool for allocating somewhat scarce but unpriced rights and resources, such as air and water. Tradable permits have emerged as the most cost--effective measure leading to the emergence of both nationwide (SO2) and supranational (CO2) emission permits markets. By means of the dynamic optimization of companies which are covered by such environmental regulations, it develop an endogenous model for the emission permit spot price dynamics that account also for the presence of asymmetric information.

World power and gas markets have a natural relationship with global tradable carbon permits markets, including the U.S.