Apple Certification Exam 9L0 509

The two R* (on both graphs) represent the efficient allocations that arise from trading.

* Germany: sold (R* - RReq) emission credits to Sweden at a unit price 'P'.
* Sweden bought 9L0 509 emission credits from Germany at a unit price 'P'.
If the total cost for reducing a particular amount of emissions in the 'Command Control' scenario is called 'X', then to reduce the same amount of combined pollution in Sweden 9L0 402 and Germany, the total abatement cost would be less in the 'Emissions Trading' scenario i.e. (X - Δ 123 - Δ def).
The example above applies not just at the national level: it applies just as well between two companies in different countries, or between two subsidiaries within the same company.