Pollution Control

Cap-and-trade (in the Human Development Area)

In this context, Cap-and-trade means: emissions trading is a market-based approach used to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants. A central authority (usually a governmental body) sets a limit or cap on the amount of a pollutant that can be emitted. The limit or cap is allocated or sold to firms in the form of emissions permits which represent the right to emit or discharge a specific volume of the specified pollutant. Firms are required to hold a number of permits (or carbon credits) equivalent to their emissions. The transfer of permits is referred to as a trade.

Resources

Hierarchical Display of Pollution control

Environment > Environmental policy > Pollution control measures