An Emission Trading System (ETS) is a market-based approach used to control pollution by providing economic incentives for reducing emissions of pollutants. Under an ETS, governments set a cap on the total level of greenhouse gas emissions and issue a limited number of permits that allow companies to emit a certain amount. Companies that reduce their emissions can sell their excess permits to others, creating a financial motivation to lower pollution levels. This system encourages innovation and investment in cleaner technologies, as companies seek to minimize their emissions to save costs. By trading permits, businesses can find the most cost-effective ways to comply with environmental regulations, ultimately contributing to the goals of climate change mitigation and sustainability.