cap and trade

  

Definition

Program enacted to promote environment-friendly policies by mandating emissions. The emissions allowance is strictly controlled and must not exceed the predetermined cap amount. Emissions permits are provided to businesses, and are capped by government. Businesses are able to transfer these permits to other capped businesses if the business determines that it will not need all the permits provided.

Use cap and trade in a sentence

  • This new legislation on cap and trade will help both the environment and the companies it is regulated to, a greener world is never a bad thing.

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  • It is very important for factories to stay under their allowed cap and trade amounts, if they do not they can get big fines.

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  • The environmental protection agency will put in strict cap and trade guidelines to businesses to try and protect us all.

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