Cap and Trade - Definition, glossary, details

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

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