Cap-and-trade programs limit pollution by selling firms a fixed amount of permits to pollute.

Question

Quizplus · Accepted Answer

Cap-and-trade programs work by setting a limit or "cap" on the amount of pollution that can be released into the environment. Firms must purchase permits for each unit of pollution they emit, and the total number of permits available corresponds to the overall cap. This system creates a market for pollution permits and provides financial incentives for firms to reduce their emissions.

Cap-And-Trade Programs Limit Pollution by Selling Firms a Fixed Amount