Which statement illustrates an environmental policy that uses cap and trade?

Question

Quizplus · Accepted Answer

Allowing drivers to buy and sell rights to emit specified levels of vehicle emissions is the hallmark of a cap and trade system. Under cap and trade, a government sets a limit (or "cap") on the total amount of emissions allowed from a particular industry or sector. The cap is then divided into individual allowances that give the holder the right to emit a certain amount of pollution. Companies or individuals that emit less than their allowance can sell their unused allowances to others who have exceeded their limit, creating a market for emissions permits. Cap and trade policies are designed to reduce overall pollution while allowing for some flexibility in meeting the emissions cap.

Which Statement Illustrates an Environmental Policy That Uses Cap and Trade