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English definition of “cap and trade”

cap and trade

noun [U]     ENVIRONMENT, SOCIAL RESPONSIBILITY
a system that puts a limit on the amount of pollution companies can produce . Companies can buy and sell rights to put harmful gases into the air , meaning a company that reduces its pollution is financially rewarded : Cap and trade has been successful in reducing acid rain in the U.S. by more than 30%. cap and trade program / scheme / system → See also emissions trading
(Definition of cap and trade noun from the Cambridge Business English Dictionary © Cambridge University Press)
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