cap and trade

[ kap uhn treyd ]


  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.



  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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Word History and Origins

Origin of cap and trade1

First recorded in 1995–2000
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Example Sentences

This could take the form of a cap and trade market or a tax on every ton of emissions produced.

That legislation included a cap-and-trade plan to lower carbon emissions.

A carbon tax or cap-and-trade regime is probably not going to happen.

Theda Skopcol has written a lengthy post-mortem on the failure of cap-and-trade legislation aimed at reducing carbon emissions.

Cap-and-trade is much kludgier than carbon taxes; subsidies to wind and solar are kludgier than cap and trade.

But since then, he has reversed course, abandoning the very cap-and-trade program he once supported.





cap and gownCapaneus