Carbon Dioxide rates have increased to 400 parts per million in the atmosphere since 2016. This alarming rise in Car dioxide is damaging our planet with more carbon dioxide in the air there are many negative impacts on the climate such as higher temperatures, more precipitation and droughts in many areas. To keep the planet sustainable, the government has stepped in to make this planet environmentally safer for future generations. Cap and Trade sometimes referred to as emissions policy where the governments set a limit on how much pollutants s is going to be allowed for (cap) all companies. Companies would have to try to avoid reaching that cap that is set to them by the government. Now if companies go beyond that set amount of pollutant the government they would often get hit with something called the carbon tax. The allowed pollution rate/cap would decrease more and more essentially as time went on. …show more content…
Now if we have company A which produces 5 and company B which produces 10 caps essentially company A since they are 5 below the limit can trade their 5 to company B who will probably need it because they have a harder time maintaining the set limit for pollution. Many people have wondered how the set limit for each company is determined? Well there’s two ways the limit is determined one is which the company gets grandfathered in so the amount the company produced before the set limit must stay the same or lower, and the second way is that a company can auction for their set