: relating to or being a system that caps the amount of carbon emissions a given company may produce but allows it to buy rights to produce additional emissions from a company that does not use the equivalent amount of its own allowance

Examples of cap-and-trade in a Sentence

Recent Examples on the Web
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Lawmakers voted last year to reauthorize the cap-and-invest program — formerly known as cap-and-trade — through 2045. Los Angeles Times, 13 Mar. 2026 On top of that, California requires a special fuel blend that adds another 15 cents per gallon, the state’s cap-and-trade program costs another 26 cents and a special sales tax for gas contributes another 10 cents, according to the California Energy Commission. Adam B. Summers, Oc Register, 24 Jan. 2026 On top of that, California requires a special fuel blend that adds another 15 cents per gallon, the state’s cap-and-trade program costs another 26 cents and a special sales tax for gas contributes another 10 cents, according to the California Energy Commission. Adam Summers, San Diego Union-Tribune, 23 Jan. 2026 The money comes from revenues generated by the state’s cap-and-trade program and an air pollution regulation fund. Linh Tat, Daily News, 9 Jan. 2026 See All Example Sentences for cap-and-trade

Word History

First Known Use

1995, in the meaning defined above

Time Traveler
The first known use of cap-and-trade was in 1995

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Cite this Entry

“Cap-and-trade.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/cap-and-trade. Accessed 13 Mar. 2026.

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