United States | News & Politics

There are caps though. My understanding is that companies get X credits, and they can sell any they don't need to other companies, and X reduces over time. AFAIK, companies don't create new credits, they merely trade them on the market as a finite resource.

I assume if you go over your carbon allotment, you pay a hefty fine.

If the government wants less carbon emissions, it reduces the number of credits available on the market or increases to tax credit for unused credits.