cap and trade
Emissions trading system
Cap and trade is an environmental policy system for reducing emissions.
A government sets a cap—a maximum total amount of pollution allowed—then issues permits that companies can buy and sell among themselves.
Companies that pollute less can sell unused permits to heavier polluters, creating a market incentive to reduce emissions: The power plant bought carbon credits under the cap-and-trade program.
Permitted amounts or stipends
- permitsGrants formal authorization
- quotasMandated numerical limits
- allocationsDesignated shares of resources
- emissions tradingMarket-based pollution control
carbon market · auction · trading floor · price floor · price ceiling · banking · borrowing · offsets
Official rules governing conduct
- legislationOfficial enactment of statutes
- environmental policyRules managing human-nature interaction
- Kyoto ProtocolMultinational emissions reduction treaty
- Paris AgreementGlobal warming limitation accord
Clean Air Act · EPA · government intervention · permitting · oversight · standards · guidelines · protocols
Respiration byproduct, photosynthesis fuel
- CO2Carbon dioxide formula
- greenhouse gasesEmissions that trap heat
- methaneSimplest alkane fuel
- nitrous oxideAnesthetic inhalant causing euphoria
sulfur dioxide · pollutants · industrial emissions · power plant emissions · vehicle emissions · smokestack · atmosphere · air quality
Tradeable raw materials
- futuresContracts for future delivery
- tradingExchanging for value
- speculationUnproven theorizing or risky investment
- arbitrageExploiting price discrepancies
volatility · price signals · cost-effectiveness · incentives · investment · liquidity · derivatives · brokerage
Rising planetary temperatures
- climate changePlanetary atmospheric transformation
- mitigationReduction of severity
- carbon neutralZero net emissions
- decarbonizationEliminating fossil fuel emissions
sustainability · clean energy · renewable energy · environmental impact · carbon sequestration · afforestation · reforestation · net zero
allowances
Permitted amounts or stipends
- permitsGrants formal authorization
- quotasMandated numerical limits
- allocationsDesignated shares of resources
emissions trading · carbon market · auction · trading floor · price floor · price ceiling · banking · borrowing · offsets · credits
regulation
Official rules governing conduct
- legislationOfficial enactment of statutes
- environmental policyRules managing human-nature interaction
- Kyoto ProtocolMultinational emissions reduction treaty
Paris Agreement · Clean Air Act · EPA · government intervention · permitting · oversight · standards · guidelines · protocols · statutes
carbon dioxide
Respiration byproduct, photosynthesis fuel
- CO2Carbon dioxide formula
- greenhouse gasesEmissions that trap heat
- methaneSimplest alkane fuel
nitrous oxide · sulfur dioxide · pollutants · industrial emissions · power plant emissions · vehicle emissions · smokestack · atmosphere · air quality · emission reduction
commodities
Tradeable raw materials
- futuresContracts for future delivery
- tradingExchanging for value
- speculationUnproven theorizing or risky investment
arbitrage · volatility · price signals · cost-effectiveness · incentives · investment · liquidity · derivatives · brokerage · supply and demand
global warming
Rising planetary temperatures
- climate changePlanetary atmospheric transformation
- mitigationReduction of severity
- carbon neutralZero net emissions
decarbonization · sustainability · clean energy · renewable energy · environmental impact · carbon sequestration · afforestation · reforestation · net zero
- allocation methodslottery, quota, rationing, first come first served, merit-based
- climate policycarbon tax, emissions standards, emissions trading, net zero, carbon neutral
- Climate Politicsclimate change, global warming, carbon tax, Paris Agreement, Kyoto Protocol
- energy policyenergy policy, energy bills, energy independence, energy security, energy efficiency
- Environmental Policyclimate policy, Clean Air Act, conservation policy, Clean Water Act, environmental regulation
- Pollution Lawair pollution, water pollution, Clean Air Act, Clean Water Act, EPA
trade, capacity, capable, incapable, capped, capacious, caps, incapacity, capping