Dear fellows,
What is the meaning of the expression “cap-and-trade” in the following text named “Obama to outline ambitious plan to cut greenhouse gases”?
(…)
"In a speech in Berlin last week, Mr. Obama called climate change “the global threat of our time” and promised swift action to avert it. The plan to be announced on Tuesday represents his first seious effort to engage the problem since he threw his support behind a Democratic cap-and-trade proposal in the House in 2009 to reduce carbon-dioxide emissions. That legislation died in the Senate in 2010.
(…)
Thank you in advance.
Claudio[/u]
“Cap and trade is one method for regulating and ultimately reducing the amount of pollution emitted into the atmosphere.
The basic concept involves two parties, the governing body and the regulated companies or units emitting pollution. The government sets a cap on pollution, limiting the amount of carbon dioxide and other harmful output that companies, or other groups, are allowed to release. The government then issues credits which allow companies to pollute a certain amount, as long as the aggregate pollution equals less than the set cap.
Since some companies can reduce polluting emissions more inexpensively than other companies, they may engage in trading any extra permits. Companies that can more efficiently reduce pollution sell permits to companies that cannot easily afford to reduce pollution. The companies that sell the permits are rewarded while those that purchase permits must pay for their negative impact.” ecomii.com/ecopedia/cap-and-trade
Dear Eugene2114,
I do thank you for your answer.
Bye,
Claudio