| China's planned national cap-and-trade carbon emissions system may at first appear to be yet another bearish factor for commodity demand in the world's largest consumer of natural resources. In theory, limiting the amount of carbon emissions by setting a price per tonne and then making polluters pay for permits above their allocated limits will serve to raise costs for carbon-intensive industries, such as steel, aluminum, power generation, copper smelting and oil refining.
A cap-and-trade system is only effective when it raises the cost of polluting to the point where the polluter limits output or invests in new technology or takes other steps to reduce emissions...............................................Full Article: Source
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