It is an enormous challenge - virtually every aspect of modern life contributes greenhouse gases to the atmosphere. The fossil fuel we use to power our homes, offices and vehicles and to produce the food and products we consume, all contribute to the problem.

We need to clean up our energy systems and reduce the amount we consume.

The way we in Europe have chosen to do this is to cap emissions and then create a market in reducing emissions. The theory goes that the cap helps to deliver the outcome we want and the market makes sure investors, companies and ultimately individuals all have an incentive to reduce emissions. The market is in the permits that are created that allow emissions to continue up to the level of the cap.

This cap and trade market in emissions began in the US and was used to successfully cut levels of acid rain causing pollution. Europe has been the quickest to adapt it to the issue of climate change but all over the world countries are developing similar schemes, from New Zealand to Taiwan, Canada to California.

The debate about how to tackle climate change has always been fierce, with many alternatives suggested, but so far it is cap and trade that has proved the most attractive option and the only large scale policy yet implemented to cut carbon emissions.