Cap and Trade
A method for controlling pollution by providing economic benefits to companies or organizations who meet specific reductions in emissions. Usually, a government agency sets a limit (or cap) on the amount of emissions a company may emit. Different companies are given the right (or credit) to emit certain amounts. Those who go beyond their cap must purchase more credits. Essentially, purchasing these credits is like being fined for pollution.
Since 1995, a cap and trade program has helped reduce the amount of sulfur dioxide produced by U.S. power plants. This has reduced the amount of acid rain.
The European Union uses an emissions trading program to regulate carbon dioxide.
Sources:
-- “Clean Air Markets: Cap and Trade,” EPA Web site. Accessed Sept. 6, 2007. http://www.epa.gov/airmarkets/cap-trade/index.html
-- “Emissions Trading,” Wikipedia. Accessed Sept. 6, 2007. http://en.wikipedia.org/wiki/Cap_and_trade
