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Cap and Trade: Background and Basics

Categorized Under: Climate



Cap and trade has profound and direct effects on companies directly responsible for emissions. Under cap and trade, companies that need to increase their emissions as part of their production must buy credits from companies who pollute less. Companies, that can cost-effectively reduce emissions, can save money on their production costs and make money by selling emissions credits to companies having a tougher time reducing their emissions. Cap and trade enables all participants to meet the total emissions cap, cost-effectively. In addition, it allows emitters to find the least-cost solutions for total pollution control, innovatively.

Insight Details

Published: Sep 19, 2008
Source: ICF International

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