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cap-and-trade mechanism
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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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cap-and-trade mechanism: Media

environmental policy
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emissions trading
How emissions trading worksAssume...
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