The cap represents the upper limit of GHG emissions allowed in a scheme, or in other words the total number (emissions budget) of allowances that is available to covered entities. When defining a cap, regulators seek to reconcile environmental targets with their economic feasibility. 

Source: ICAP ETS Brief #1 What is Emissions Trading

A fixed sum of emissions or an absolute cap ensures that emissions will not exceed a given limit, and therefore delivers a specific environmental outcome. Allowance price levels are a function of how many allowances are available under the cap, how easy it is for installations to reduce emissions, and other factors such as the weather and economic growth. Together these variables need to be taken into consideration when defining a cap. Though the carbon price also depends on these other factors, a generous emissions budget will tend to lead to the market being long and a low allowance price, making it cheap for covered entities to comply. By contrast, a relatively strict emissions budget or ‘tight cap’ means a more limited supply of allowances, or the market being short, resulting in a higher allowance price and a greater fiscal incentive to reduce emissions.

Setting a cap also implies choosing a baseline against which emissions are to be reduced. The cap is usually set in relation to historical emissions, often referred to as a base year, or projected future emissions (e.g. against a business-as-usual scenario). Clear communication of the trajectory, or the path from the basis to the target, helps capped entities plan investment to reduce emissions. 

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Overall GHG emissions (excluding LULUCF)
Canada - Nova Scotia
Emissions: 15.9 MtCO2e MtC02e (2017)

Canada - Québec Cap-and-Trade System
Emissions: 78.7 MtC02e (2017)

China - Beijing pilot ETS
Emissions: 188.1 MtC02e (2012)

China - Chongqing pilot ETS
Emissions: ~300 MtCO2e MtC02e (2018)

China - Fujian pilot ETS
Emissions: 240.0 MtCO2e MtC02e (2014)

China - Guangdong pilot ETS
Emissions: 610.5 MtC02e (2012)


China - Hubei pilot ETS
Emissions: 463.1 MtC02e (2012)

China - Shanghai pilot ETS
Emissions: 297.7 MtC02e (2012)

China - Shenzhen pilot ETS
Emissions: 83.45 MtC02e (2010)

China - Tianjin pilot ETS
Emissions: 215 MtC02e (2012)

China National ETS
Emissions: 10,976 MtC02e (2012)

EU Emissions Trading System (EU ETS)
Emissions: 4,323 MtC02e (2017)

Japan - Saitama Target Setting Emissions Trading System
Emissions: 36.6 MtC02e (2016)

*The overall emissions figure for Saitama is higher than the total of the emissions by sector because the former includes all GHGs in Saitama, whereas the emissions by sector only measures CO2 emissions.

Japan - Tokyo Cap-and-Trade Program
Emissions: 64.8 MtC02e (2017)

Kazakhstan Emissions Trading Scheme
Emissions: 353.2 MtC02e (2017)

Korea Emissions Trading Scheme
Emissions: 709.1 MtC02e (2017)

Emissions: 733.8 MtC02e (2017)

New Zealand Emissions Trading Scheme
Emissions: 81.0 MtC02e (2017)

Swiss ETS
Emissions: 47.2 MtC02e (2017)

USA - California Cap-and-Trade Program
Emissions: 424 MtC02e (2017)

USA - Massachusetts Limits on Emissions from Electricity Generators
Emissions: 73.3 MtC02e (2017)

USA - Regional Greenhouse Gas Initiative (RGGI)
Emissions: 463.6 MtC02e (2014)

Emissions: 237 MtC02e (2014)

German National Emissions Trading System
Emissions: 906.6 MtC02e (2017)

Emissions: 3.49 MtCO2 MtC02e (2015)

Emissions: 320.6 MtC02e (2017)

USA - Pennsylvania
Emissions: 264.4 MtC02e (2016)

USA - Transportation and Climate Initiative (TCI)
Emissions: 1034.8 MtC02e (2014)

USA - Virginia
Emissions: 136 MtC02e (2017)

Emissions: 1,036.3 MtCO2e MtC02e (2015)

Emissions: 111.7 MtC02e (2016)

Emissions: 1457 MtC02e (2016)

Emissions: 1291.7 MtC02e (2017)

Emissions: 394.7 MtC02e (2015)

Emissions: 210 MtC02e (2016)

Taiwan, China
Emissions: 293.1 MtC02e (2016)

Emissions: 318.7 MtC02e (2013)

Emissions: 526.3 MtC02e (2017)

United Kingdom
Emissions: 461.7 MtC02e (2018)

USA - New Mexico
Emissions: 66.7 MtC02e (2018)

USA - New York City
Emissions: 50.7 MtC02e (2017)

USA - North Carolina
Emissions: 150.1 MtC02e (2017)

USA - Oregon
Emissions: 62.0 MtC02e (2016)


USA - Washington
Emissions: 97.4 MtC02e (2017)

Emissions: 321.5 MtC02e (2014)


Gilbert, A., Blinde, P., Lam, L., Blyth, W. (2014): Cap-Setting, Price Uncertainty and Investment Decisions in Emissions Trading Systems. Ecofys and Oxford Energy Associates.

Wing, S., Ellerman, A.D., Song, J. (2009):
Absolute vs. Intensity Limits for CO2 Emission Control: Performance under Uncertainty. Published in: H. Tulkens & R. Guesnerie (eds.) Design of Climate Policy. Cambridge, MA: MIT Press. 

Diekman, J. (2013): EU Emissions Trading: The Need for Cap Adjustment in Response to External Shocks and Unexpected Developments? On behalf of the German Federal Environment Agency.