Carbon emission trading (also called carbon market, emission trading scheme (ETS) or cap and trade) is a type of emission trading scheme designed for carbon dioxide (CO2) and other greenhouse gases (GHG). It is a form of carbon pricing. Its purpose is to limit climate change by creating a market with limited allowances for emissions. This can reduce the competitiveness of fossil fuels, and instead accelerate investments into renewable energy, such as wind power and solar power. Fossil fuels are the main driver for climate change. They account for 89% of all CO2 emissions and 68% of all GHG emissions.

A carbon budget is a concept used in climate policy to help set emissions reduction targets in a fair and effective way. It examines the "maximum amount of cumulative net global anthropogenic carbon dioxide emissions that would result in limiting global warming to a given level". It can be expressed relative to the pre-industrial period. In this case, it is the total carbon budget. Or it can be expressed from a recent specified date onwards. In that case it is the remaining carbon budget.