Why is it called “Cap”?
If I understand it correctly, Big Brother would assign every factory or utility, etc., a maximum amount of carbon emissions for each year. That is the ceiling, or "cap." If your plant goes over its carbon emissions allotment, you get fined - or worse. But you can trade (or buy) allotments from another party which would enable you to go over your assigned "carbon footprint." The party who sells you part of his "cap" must reduce his allotment accordingly. So the total emissions theoretically remains at the total limits that Big Brother determines.