Cap and Trade

Cap and Trade
  Cap and Trade is a market-based policy tool for protecting human health and the environment. A cap and trade program first sets an aggressive cap, or maximum limit, on emissions. Sources covered by the program then receive authorizations to emit in the form of emissions allowances, with the total amount of allowances limited by the cap. Each source can design its own compliance strategy to meet the overall reduction requirement, including sale or purchase of allowances, installation of pollution controls, implementation of efficiency measures, among other options. Individual control requirements are not specified under a cap and trade program, but each emissions source must surrender allowances equal to its actual emissions in order to comply. Sources must also completely and accurately measure and report all emissions in a timely manner to guarantee that the overall cap is achieved. (EPA)

Energy terms . 2014.

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  • cap and trade — A policy that seeks to limit pollution. Under a cap and trade program, a company gets an emissions permit for every ton of carbon dioxide that it releases. Companies that produce fewer emissions can trade their extra permits to companies that are …   Law dictionary

  • cap-and-trade — a program for managing pollution by setting upper limits for allowable emissions and issuing permits that can be traded among various sources of emissions …   Useful english dictionary

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  • cap and trade — The basis of the carbon trading mechanism. When an authority sets a limit or cap on something ( i.e. carbon dioxide (CO2) emissions) and allows those who exceed the limit to buy credits from those who have credits to spare. Exchange Handbook… …   Financial and business terms

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  • cap-and-trade — /kæp ən ˈtreɪd/ (say kap uhn trayd) adjective of or relating to an emissions trading scheme in which a cap is set for allowable emissions in a particular area, and individual emitters are given their allocation of emission permits which they can… …  

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  • cap and trade — noun A market based approach to control pollution by providing economic incentives for achieving reductions in emissions, participating companies being assigned an emissions quota that can be traded with others if not used …   Wiktionary

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  • Trade — A verbal (or electronic) transaction involving one party buying a security from another party. Once a trade is consummated, it is considered done or final. Settlement occurs 1 5 business days later. The New York Times Financial Glossary * * * ▪ I …   Financial and business terms

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