The article explores how carbon trading, which started with the Kyoto Protocol, has expanded globally. It focuses on the European Union's carbon trading system (EU ETS) where European Union Allowances (EUAs) are traded in markets. Different types of contracts for EUAs are explained. The EU ETS has successfully set a price for carbon emissions, a key goal. The potential for connecting the EU ETS with other international carbon markets is also discussed. Trading units from programs like Joint Implementation and Clean Development Mechanism are also included in the analysis. The overall finding is that the EU ETS has effectively established a cost for carbon emissions, achieving a significant objective.