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Emissions trading, also known as cap-and-trade, is a market-based approach used to control pollution by providing economic incentives for reducing emissions of pollutants. Under this system, a government or regulatory body sets a cap on the total level of greenhouse gas emissions permitted. Emission allowances or permits, each representing the right to emit a specific amount of pollutants (typically one metric ton of CO₂ or equivalent), are then issued. These allowances can be allocated freely or auctioned to polluting entities. Companies that reduce their emissions below their allowance can sell the surplus to others who exceed their limits, thereby creating a marketplace for trading emissions. ______ __________ _______ ___ ____ ___ ______ ____ ________ ____ ________ ____.
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