cap and trade schemes

Cap and trade schemes are market-based instruments that aim to reduce greenhouse gas emissions. They involve setting a limit (or cap) on the total amount of emissions that can be released by industries or entities. These emission allowances are then divided among participants, who can either reduce their own emissions or purchase additional allowances from those who have excess. By creating a market for emissions, cap and trade schemes provide incentives to reduce pollution efficiently and cost-effectively.

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