The ETS explained

Imagine (if you will) an ocean oil slick creeping ever
nearer the coast of a country. In this scenario, the oil
is leaking from several wells owned by a number of
different companies. Wildlife habitats, fisheries and
estuarine waters are threatened by the black ooze;
already there are pictures in the media of oil-soaked
seabirds. Something must be done. The government
of the country comes up with a solution. It will divide
the quantity of oil that is leaking—at least six billion
litres a day—into tradeable units. Anyone wanting to
pollute the coastline with oil will thus be able to do so,
provided they then buy credits from a company that
is not polluting the coastline with oil. The second
company can then trade those units on a pollution
market for others to buy and sell as they choose.
There is an exemption, however, for really big oil-
polluting companies: they don't have to buy credits
or indeed do anything at all about the oil their wells
are leaking. They have been advised that they can
expect to be brought into the scheme in 2015 or
thereabouts but that the deadline may be extended
when the time comes. Payment for the pollution is
required, however, from wage-earning individuals
onshore whose regular purchases of petrol help to
keep in business the oil-polluting companies: that
would seem to be eminently fair. Meanwhile, more
oil, lots more oil, keeps coming ashore. Some people
say this scheme is flawed. But it's a start, isn't it?