What is Cap and Trade?
A cap-and-trade system is one of a variety of policy tools that exists to reduce the greenhouse gas emissions responsible for climate change. A cap-and-trade program sets a clear limit on greenhouse gas emissions and minimizes the costs of achieving this target. By creating a market, and a price, for emission reductions, cap and trade offers an environmentally effective and economically efficient response to climate change.
Ultimately, cap-and-trade programs offer opportunities for the most cost-effective emissions reductions. Many challenging issues must be addressed before initiating the program. Once established though, a well-designed cap-and-trade market is relatively easy to implement, can achieve emissions reductions goals in a cost-effective manner, and drives low-greenhouse gas innovation.
Resources accessible on this page help explain what cap and trade is and how it works to address the climate change challenge:
- Climate Change 101 Series: Cap and Trade explains how a cap-and-trade program sets a clear limit on greenhouse gas emissions and minimizes the costs of achieving this target.
- Pew's Cap and Trade vs. Carbon Tax Page
- Congressional Policy Brief Series
- Climate Policy Memo Series
- Capitol Hill Briefings
- Paper: Offsets in Cap & Trade
- Brief: Policy Options to Reduce GHG Emissions from Transportation Fuels
- Poll: Americans Favor a Carbon Cap
- Op-Ed: Handling Climate Change
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