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

Question

Quizplus · Accepted Answer

Cap-and-trade is a policy approach where a cap is set on the total amount of greenhouse gases that can be emitted, and then permits are issued to companies allowing them to emit a certain amount. Companies that emit less than their allotted amount can sell their permits to companies that emit more than their limit. This creates a market system for emissions reductions, incentivizing companies to reduce their emissions in a cost-effective way. Choice A describes this process accurately. The other choices are unrelated or incorrect.

Cap-And-Trade Refers to