This is an economic incentive-based alternative to command-and-control regulation. In an emissions trading program, sources of a particular pollutant (most often an air pollutant) are given permits to release a specified number of tons of the pollutant. The government issues only a limited number of permits consistent with the desired level of emissions. The owners of the permits may keep them and release the pollutants, or reduce their emissions and sell the permits. The fact that the permits have value as an item to be sold or traded gives the owner an incentive to reduce their emissions.
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Hydraulic fracturing, often called fracking, fracing or hydrofracking, is the process of initiating and subsequently propagating a fracture in a rock layer, employing the pressure of a fluid as the source of energy. The fracturing, known as a frack job (or frac job), is done from a wellbore drilled into reservoir rock formations, in order to increase the extraction rates and ultimate recovery of oil and natural gas.
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