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Emissions trading
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Thick smoke billows from an industrial smokestack, spreading across the sky and blending with clouds. Side-by-side diagrams compare command-and-control and cap-and-trade approaches to pollution control. The left shows both Plant A and Plant B each reducing emissions by 50 tons, resulting in higher total costs. The right shows cap-and-trade, where Plant A reduces emissions by 75 tons and Plant B by 25 tons, with Plant B paying Plant A for extra reductions, leading to lower overall costs. Emission levels, reduction amounts, and costs are labeled for both methods.
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Thick smoke billows from an industrial smokestack, spreading across the sky and blending with clouds.
Emissions from industrial smokestacks.

Emissions trading

pollution control
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Encyclopaedia Britannica's editors oversee subject areas in which they have extensive knowledge, whether from years of experience gained by working on that content or via study for an advanced degree....
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Emissions trading, an environmental policy that seeks to reduce air pollution efficiently by putting a limit on emissions, giving polluters a certain number of allowances consistent with those limits, and then permitting the polluters to buy and sell the allowances. The trading of a finite number of allowances results in a market price being put on emissions, which enables polluters to work out the most cost-effective means of reaching the required reduction. Emissions trading has...

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