Welcome to the Financial Times Lexicon

Browse thousands of words and phrases selected by Financial Times editors and suggest new terms for the glossary.

 

Term of the day

cap and trade

Systems whereby a limit is imposed on the amount of greenhouse gas that companies may produce, and by which they are allowed to trade their quota with one another. This should, in theory, ensure that greenhouse gases are reduced at the lowest possible cost, as the cleanest companies will benefit by selling their unused quota to laggards.  See carbon market.

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Cap and trade: Perennially unpopular