How does the gov use the cap and trade approach currently to environmental regulation?

The cap and trade approach is a type of environmental regulation commonly used by governments to reduce or limit pollution. It works by setting a “cap” on the amount of a particular pollutant that can be released from a facility, such as a power plant or factory. This cap is enforced by a government agency and companies must either reduce their emissions to meet the cap or trade emissions credits, allowing them to purchase credits to produce more than their allotted emissions. The cap and trade approach is intended to shift the costs of polluting to those companies who choose to emit more than what is allowed by the cap, providing an economic incentive for businesses to reduce their emissions.