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Emissions trading or cap and trade is a government-mandated, market-based approach to controlling pollution by providing economic incentives for achieving reductions in the emissions of pollutants. Various countries, states and groups of companies have adopted such trading systems, notably for mitigating climate change. Under the established system, the “cap and trade system”, an emissions cap limits the maximum amount of certain greenhouse gas emissions, measured in tonnes, companies may emit during a certain period of time. Emissions trading systems can create incentives to reduce emissions.