FACTBOX: Carbon trading schemes around the world

(Reuters) - Companies and governments are turning to emissions trading as a weapon to fight climate change in a carbon market worth $125 billion last year.

Carbon markets allow polluters to buy rights to emit greenhouse gases such as carbon dioxide and are often seen as more politically acceptable than carbon taxes.

Under cap and trade schemes, companies or countries face a carbon limit. If they exceed their limit they can buy allowances from other polluters which stay under their cap.

Alternatively, they can buy carbon offsets from projects which avoid greenhouse gas emissions outside the scheme, often in developing countries.

On Thursday, Australia's parliament rejected a plan for an emissions trade regime, prolonging financial uncertainty for major emitters. But the government renewed its pledge to push through the scheme before December.

Following is a list of established and proposed schemes:

ESTABLISHED SCHEMES

1. Kyoto Protocol:

Launched 2005.

Mandatory for 37 developed nations, excluding the United States which never ratified the pact

Covers: all six main greenhouse gases

Target: 5 percent reduction in 1990 emissions by 2008-2012

How it works: Rich countries cut greenhouse gases at home or buy emissions rights from each other -- if one country stays within its target it can sell the difference to another emitting too much. Alternatively, they can buy carbon offsets from projects in developing countries under Kyoto's clean development mechanism.

The present round of Kyoto expires in 2012 and the world has committed to sign a new pact in December.

2. European Union Emissions Trading Scheme:

Launched 2005.