cap and trade

American  

[kap uhn treyd] / ˈkæp ən ˈtreɪd /

noun

1. a system in which organizations and countries are permitted to produce a set amount of carbon dioxide emissions and other atmospheric pollutants, with the provision that those who do not produce their entire allowance may sell their remaining capacity to those who have exceeded their allowed limit (often used attributively).

   a cap-and-trade program.

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cap-and-trade British  

adjective

1. denoting a scheme which allows companies with high greenhouse gas emissions to buy an emission allowance from companies which have fewer emissions, in a bid to reduce the overall impact to the environment

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Etymology

Origin of cap and trade

First recorded in 1995–2000

Example Sentences

Hundreds of companies in California already have to disclose their direct emissions through the state’s cap and trade program, said Danny Cullenward, a climate economist and fellow at the University of Pennsylvania’s Kleinman Center for Energy Policy.

From Seattle Times

And it also neglected to address long-standing issues with California's cap and trade program, according to Ross Brown, author of the report.

From Salon

“He had seen President Obama work very hard to get cap and trade over the finish line,” she said.

From Seattle Times

Mr. Glicksman made the case that the decision could actually increase energy costs for some consumers by constraining the government’s authority to implement emissions trading policies, also known as cap and trade, that can be cost-efficient methods for utility companies to reduce their carbon footprint while passing savings to customers.

From Washington Times

In an actual cap and trade market system, governments set a maximum amount of pollution that companies can release.

From Seattle Times