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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 from the Cambridge Business English Dictionary © Cambridge University Press)
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