California Cap-and-Trade Program Alowance

Synonyms

California Cap and Trade Program Alowance, C2ES Allowance

Definition

Allowance: A government-issued authorization to emit a certain amount. In greenhouse gas markets, an allowance is commonly denominated as one ton of CO2e per year. The total number of allowances distributed to all entities in a cap-and-trade system is determined by the size of the overall cap on emissions. Allowance distribution: The process by which emissions allowances are initially distributed under an emissions cap-and-trade system. Authorizations to emit can initially be distributed in a number of ways, either through some form of auction, free allocation, or some of both. (C2ES, 2014)