International Development and Sustainability
Cap-and-trade systems are market-based approaches used to control pollution by providing economic incentives for reducing emissions. These systems set a limit, or 'cap', on the total level of greenhouse gas emissions allowed, and companies can buy and sell permits that enable them to emit a certain amount. This creates a financial motive for businesses to lower their emissions, as those who reduce their output can sell their excess permits to those who need them.
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