Question

Explain how a cap-and-trade program works.

Answer 1

Cap and trade is a term for a government program . It designed to limit or cap the emissions of some chemicals particularly carbon dioxide as a result of industrial activity the mean attraction of cap and trade is carbon tax. It is attempts to reduce environmental damage without causing undue economic hardship to the industry. A cap and trade program can work in many ways. A government issues a limited number of annual permits that allow companies to emit acertain amount of carbon dioxide. If the companies are laxed if they produce a higher level of emissions than produce a higher level of emissions than their permits allow. The cap and trade system is sometimes described as a market system it creates an exchange value for emissions and the trade part is a market for companies to buy and sell allowances that let them emit only certain amount as supply and demand set the price this type of treading gives a strong incentive to save money by cutting emissions in the most cost effective ways. Cap and trade is work only the help of government because private or individual other companies want increase their profit but government look welfare also so they make lows.