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.

With international emissions trading, a governing body sets a cap on pollution emissions and provides companies with credits that allow them to emit a specific amount of environmentally harmful gases. An enterprise that does not use their allocation can sell the unneeded credits to another company that needs to increase its emissions output. The process is commonly known as cap and trade.

A cap and trade system is not a new concept. It was used for the first time in the U.S. as part of its Acid Rain program. The European Union currently uses the system to reduce carbon emissions. As part of the global treaties to control greenhouse gases, a cap and trade system is expected to lower carbon emissions.

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.

As companies that emit a larger amount of greenhouse gases pay more than those who pollute less, international emissions trading is seen as being good for the overall environment. These financial penalties should be a great incentive for companies to lower their emissions and help in the efforts 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.

International emissions trading is an example of free market environmentalism. Once the governing agency sets the allowable emissions limits, the decision is left up to companies whether or not to implement emission reduction methods that will significantly save them money over the long term.