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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

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

From Seattle Times ● Aug. 8, 2022

It says the role of cap and trade in achieving the state’s goals will likely diminish.

From Seattle Times ● May 10, 2022

For residents living alongside refineries, complex programs such as cap and trade boil down to a single concern: When and how will the quality of our lives improve?

From Los Angeles Times ● Mar. 22, 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

Lawmakers voted last year to reauthorize the cap-and-invest program — formerly known as cap-and-trade — through 2045.

From Los Angeles Times ● Mar. 13, 2026

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

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

When California introduced its cap-and-trade system and a carbon border fee on imported electricity, generators in neighboring states rerouted low-carbon electricity to California while sending carbon-intensive electricity elsewhere.

From The Wall Street Journal ● Dec. 21, 2025

In September, Newsom signed a package of bills that extended the state’s signature cap-and-trade program through 2045.

From Los Angeles Times ● Nov. 12, 2025