Sustainable Business Practices
Cap-and-trade systems are market-based environmental policy tools designed to reduce greenhouse gas emissions by setting a cap on total emissions and allowing companies to buy and sell emission allowances. These systems incentivize companies to innovate and reduce their emissions since they can profit from selling unused allowances while still adhering to regulatory limits. This approach reflects a shift towards incorporating economic mechanisms in environmental governance, emphasizing the importance of balancing economic growth with sustainable practices.
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