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• cap and trade
  cap and trade

  noun

  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).
• cap-and-trade
  cap-and-trade

  adjective

  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

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

See Examples For:

cap and trade cap-and-trade

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 ● Jan. 31, 2023

The program, called cap and trade, was the first of its kind in the U.S. when launched in 2013 and set the ambitious goal of slashing turn-of-the-century emission levels by 40% by the year 2030.

From Los Angeles Times ● Mar. 22, 2022

Advocated of cap and trade say such market-based climate programs encourage companies to adopt cost-effective emissions reductions.

From Seattle Times ● Feb. 23, 2022

The state is required to reduce emissions 40% below 1990 levels by 2030, an ambitious target, and the state has previously said more than a third of those reductions will come from cap and trade.

From Seattle Times ● Feb. 15, 2022

The Regional Clean Air Incentive Market, or RECLAIM, program mimicked a cap and trade procedure, allowing refineries to pay to pollute.

From Salon ● Nov. 14, 2021

That’s the multistate cap-and-trade association that sets ever-tightening emissions targets for greenhouse gases.

From The Wall Street Journal ● Feb. 5, 2026

The proposal also lays out how to spend money from California’s signature cap-and-trade program, which sets limits on greenhouse gas emissions and allows large polluters to buy and sell unused emission allowances at quarterly auctions.

From Los Angeles Times ● Jan. 9, 2026

Economists love using prices to solve societal problems, from congestion pricing and toll lanes to cap-and-trade for carbon.

From The Wall Street Journal ● Jan. 8, 2026

Among those bills was an extension of the state’s nation-leading cap-and-trade program through 2045.

From Los Angeles Times ● Sep. 24, 2025

It includes reauthorization of California’s signature cap-and-trade program and the expansion of a regional electricity market, among other items.

From Los Angeles Times ● Sep. 11, 2025