This means there is a ‘cap’ on the total amount of certain greenhouse gases that can be emitted from factories, power plants and other installations in the country. At the beginning of each year, companies receive emission allowances which can be sold or bought from one another as needed. One allowance is equivalent to one tonne of CO2 that a holder is allowed to emit. At the end of each year, each company must surrender enough allowances to cover all its emissions. If a company has excess allowances it can sell it to its peers who are short of allowances.  The EU ETS has put a price on carbon emissions and shown that it is possible to trade in greenhouse gas emissions. Thus ‘Cap and Trade’ provides a platform for carbon trading.

Other Terms

	Carbon capture and storage		Carbon sink		Carbon Sequestration
	Clean Development Mechanism		Climate Change		Carbon Credits
	Carbon Trading		Carbon Footprint		Carbon Offset
	CO2 Scrubber		Chemical Absorption		Cogeneration
	Certified Emission Reduction (CER)		Coal Bed Methane (CBM)		Chicago Climate Exchange (CCX)
	Carbon Cycle		Carbon Tax		Clathrate Gun Hypothesis
	Canadian Sedimentary Basin		Carbon dioxide Fertilization		Carbon dioxide Equivalent
	Carbon Intensity		Clean Coal technology		Carbon Emission Reduction Target (CERT)
	Combined Cycle Gas Turbine (CCGT)		Corporate Social Responsibility (CSR)		Carbon Market
	Conference of Parties (COP)		Carbon Allowance		Carbon Offset
	Cap Rock		Chloroflurocarbons (CFCs)		CO2 migration
	Carbon Adsorbent		California Climate Action Registry (CCAR)		Carbon Financial Instrument (CFI) contract
	Carbon leakage		Carbon Neutral		Climate Feedback
	Climate lag		Coal Mine Methane		Carbon Accounting
	Coal Gasification		Carbon Price		Carbon Calculation

Power Plant CCS - Glossary