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If a cap-and-trade approach were to be used, what is the expected effect on CO2\mathrm{CO}_{2}-emitting factories as a nation's government begins reducing the number of CO2\mathrm{CO}_{2} emission permits?

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Cap-and-trade

  • A method of reducing CO2CO_2 emissions in which a cap sets an upper limit on the amount of pollution that can be generated and trading allows corporations to buy and sell pollution allowances.

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