A tool that puts a price on emissions of greenhouse gases with the aim of reducing them. All sectors of Aotearoa New Zealand’s economy, apart from agriculture, pay for their emissions through the NZ ETS. A select group of large businesses are required to buy units to cover their emissions. These businesses pass on these costs to their customers. The ETS provides an incentive to reduce emissions. It is one of the government’s main tools to meet our emissions target under the Paris Agreement.