So, what is cap and trade?
Put simply, cap and trade is a market-based tool usually used by a state or central government to reduce pollution in the atmosphere. Under a cap and trade system, the ‘responsible authorities’ set a limit on allowable emissions, which is gradually lowered over time towards a national reduction target. Permits are issued to companies indicating their right to emit a specific amount of pollution. These permits can be traded in the market place. The first example of a successful cap and trade system took place in North America under the framework of the US Acid Rain Programme. The target here was sulfur dioxide emissions. With respect to greenhouse gas emissions, the European Union Emission Trading System (EU ETS), in operation since January 2005, is the most advanced scheme in which certain CO2-emitting industries of the EU member states must comply with individual ‘emissions allowances’ assigned via a national allocation plan. If a firm emits less than its quota, it can sell surplus al
Related Questions
- Since Cap & Trade is already on the table wouldn’t it be beneficial to just get it passed and then try to refine the policy or push Fee & dividend?
- Was the cap and trade scheme a deceitful and worthless scrap of paper as The Guardian says?
- How can we cap and trade rental rights in my co-op (condo-ish) building?
