Cap-and-trade refers to
A) capping emissions and issuing tradeable emissions permits.
B) countries trading fishing rights in international waters.
C) capping the benefits gained from pollution controls.
D) capping taxes on firms that engage in international trade.
E) capping revenue from selling emissions permits.

Question

Quizplus · Accepted Answer

Cap-and-trade is a system of limiting the amount of pollution that can be emitted (the cap), and then allowing for emissions permits to be bought and sold on a market (the trade). This allows for companies who are able to reduce their emissions below the cap to sell their excess permits to companies who are struggling to meet their targets. It incentivizes companies to reduce their emissions, as they can profit from selling their permits, and provides flexibility in achieving emissions reductions.

Cap-And-Trade Refers to