What is the Idea behind Tradable Pollution Permits?

-Control Pollution by Establishing a Cap on it. The Government will Set an Optimal Level of Pollution, and Allocate Permits to allow Firms to emit a Certain Amount over a Year -Firms can Trade their Permits with other Firms. So more Green Firms can sell their Permits and Profit from them -The Idea thus is to Incentivise Green Production so you can Profit from your Emissions -Fines will be Dished Fines if they Exceed their Allowances. Furthermore the Number of Allowances is Reduced.