Usually means: Market-based system limiting emissions.
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We found 7 dictionaries that define the word cap and trade:

General (5 matching dictionaries)
  1. cap-and-trade: Merriam-Webster
  2. cap-and-trade, cap-and-trade: Collins English Dictionary
  3. cap and trade: Wiktionary
  4. Cap-and-trade, Cap and trade: Wikipedia, the Free Encyclopedia
  5. cap and trade: Longman Dictionary of Contemporary English

Business (2 matching dictionaries)
  1. Cap And Trade: Investopedia
  2. BusinessDictionary.com (No longer online)

Definitions from Wiktionary (cap and trade)

noun:  A market-based approach to control pollution by providing economic incentives for achieving reductions in emissions, participating companies being assigned an emissions quota that can be traded with others if not used.

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