The European Union Emission Trading System is the cornerstone of the European Union's climate policy, an ambitious mechanism designed to reduce greenhouse gas emissions in the atmosphere. But what does this system really entail? How does it work? And what impact does it have on industries, the economy, and the environment? This book offers a thorough examination of the fundamental aspects of the emission trading system, encompassing its core principles, regulatory phases, and economic impacts on firms' behaviour and performance. Given the nature of the carbon credit market, it also investigates the market's vulnerability to illicit activities, proposing a methodology to provide risk indicator regarding potential abnormal firms' behaviours. Whether you're a student, an academic, a policymaker, or an industry professional, this text proves to be an indispensable tool for fully understanding the role and importance of the EU ETS in the context of combating climate change at both European and global levels.