[Answer] What is cap and trade policy?

Answer: a cap on emissions is set and then permits are created up to the level of this cap.
What is cap and trade policy?

American Clean Energy and Security Act – Wikipedia

Carbon price – Wikipedia

Emissions trading – Wikipedia

Cap and dividend – Wikipedia

Emissions trading (also known as cap and trade emissions trading scheme or ETS) is a market-based approach to controlling pollution by providing economic incentives for reducing the emissions of pollutants. A central authority (usually a governmental body) allocates or sells a limited number of permits that allow a discharge of a specific quantity of a specific pollutant over a set time period. Pollut…

Emissions trading (also known as cap and trade emissions trading scheme or ETS) is a market-based approach to controlling pollution by providing economic incentives for reducing the emissions of pollutants. A central authority (usually a governmental body) allocates or sells a limited number of permits that allow a discharge of a specific quantity of a specific pollutant over a set time period. Polluters are required to hold permits in amount equal to their emissions. Polluters that want to increase their emissions must buy permits from others willing to sell them. Financial derivatives of permits can also be traded on secondary markets. Cap and trade (CAT) programs are a type of flexible environmental regulation that allows organizations and markets to decide how best to meet policy targets. This is in contrast to command-and-control environmental regulations (such as best available technology (BAT) standards and government subsidies). A 2020 study found that the European Union Emissions Trading System successfully reduced CO2 emissions even though the prices for carbon were set at low prices.

Current status Various countries states and groups of companies have adopted such trading systems notably for mitigating climate change .

Current status Various countries states and groups of companies have adopted such trading systems nota…

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