Carbon trading plays a crucial role in combating climate change by providing a market-based approach to reduce greenhouse gas emissions. This mechanism allows countries or organizations to buy and sell permits for emissions, incentivizing reductions where they are most cost-effective. By assigning a monetary value to carbon, it encourages investments in renewable energy and sustainable practices while promoting innovation. Carbon trading can also support conservation projects, integrating environmental health with economic growth, thereby contributing to broader climate change mitigation efforts.