: 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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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 proposal also lays out how to spend money from California’s signature cap-and-trade program, which sets limits on greenhouse gas emissions and allows large polluters to buy and sell unused emission allowances at quarterly auctions. Los Angeles Times, 10 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 11 Feb. 2026.

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