Cap-and-Trade is an environmental policy designed to reduce greenhouse gas emissions. It sets a limit, or "cap," on the total amount of emissions that can be released by companies. Each company receives or buys allowances that permit them to emit a certain amount of pollutants. If a company reduces its emissions below its allowance, it can sell its extra allowances to other companies that need them. This system encourages companies to innovate and find cost-effective ways to lower their emissions. By creating a market for emissions allowances, Cap-and-Trade aims to promote cleaner technologies and help combat climate change while allowing economic flexibility.