Cap and Trade Regulation

Cap and Trade Regulation

An environmental policy tool that controls large amounts of emissions from a group of sources. Cap and trade programs set a cap, or limit, on emissions. Allowances for emissions are then traded among sources. The intent is to create economic market forces that drive cost-effective reductions of emissions. [Source: U.S. Environmental Protection Agency (USEPA) website]  California’s Cap and Trade regulation became effective January 1, 2012 for power plants and other large emitters within certain sectors that reported GHGs exceeding 25,000 MTCO2e during any of the measurement years (2009-2012).

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