cap-and-trade system
A cap-and-trade system is a market-based environmental policy that sets a limit (or cap) on the total amount of pollutants that can be emitted by industries. It then allows companies to buy, sell, or trade these emission permits, encouraging emission reductions where they are most cost-effective.
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Related Concepts (20)
- allowances
- carbon emissions
- carbon footprint
- carbon market
- carbon offsets
- carbon pricing
- clean development mechanism
- climate change mitigation
- compliance costs
- emission reduction targets
- emissions trading
- environmental economics
- greenhouse gases
- international cooperation
- kyoto protocol
- market-based approach
- pollution control
- regulated industries
- renewable energy development
- sustainable development
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