What began as a concept to address adverse climate change is soon to become a reality. International emissions trading is part of several global protocols as a means of controlling the costs of reducing greenhouse gas emissions. The intent is to allow enterprises to trade unused emissions in much the same manner that other commodities are traded on the global market.

By offering economic incentives, which aim to reduce gas emissions, it is hoped that air pollution will be in part controlled. There are a number of international emissions trading markets in place around the world, which have been implemented prior to the advancement of regulation.

Governments realize that certain companies may need to emit a larger amount of environmentally damaging gas than another. In an international emissions trading scenario, the government will issue credits to each company allowing them to emit a specified amount of gas. Thus, if one company needs to emit more than the other, they can trade credits. This procedure is known as cap and trade.

As there are global treaties in place with the aim of controlling greenhouse gases, the successful implementation of a cap and trade system is expected to lower carbon emissions significantly. The concept is not new however, as it was first used in the United States during the “acid rain” program. In Europe, the EU uses this system in its carbon emission reduction program.

Companies are well aware that they need to monitor their greenhouse gas emissions and there is tracking software available to help with this goal. Data is available based on the inventory of direct and indirect greenhouse gas emissions, which shows the companies carbon footprint, identifies areas for reduction and manages their overall allocation.

Under international emissions trading, companies that pollute less are rewarded for their efforts, while those that are major contributors to pollution pay more for their emissions. The concept encourages enterprises to lower their emissions in an effort to reduce global warming.

Countries around the world are looking at a number of initiatives in the effort to reduce global warming. Laws and treaties have been introduced in the United States and other countries with the goal of reducing air pollution. Several chemicals are known to be major contributors: hydrochlorofluorocarbons, chlorofluorocarbons, perfluorocarbons, carbon dioxide, in particular. Certain products are being phased out in this effort, including refrigerant gas used in heating, ventilation and air-conditioning systems and commercial refrigeration and air-conditioning systems.

The concept of international emissions trading is seen as being a great example of free-market environmentalism. As companies are very often driven by cost savings, it is anticipated that they will voluntarily implement emission reduction methods, within the limits set by the governing agency.