Economists like the system of putting a price on carbon in order to reduce carbon emissions. The easiest method is to put a tax on carbon emissions, but it has been more popular to use the cap and trade system. This article describes how the cap and trade system is working California and in some Northeastern states. California spent a lot of time studying the problems that have emerged in the European system before implementing its plan. California even funds projects in other states. For example, a dairy farmer in Wisconsin is using funds from California to convert the methane from cow manure into electric energy. Even though the farmer does not believe that human behavior is the cause of global warming, he was eager to use the funds from California to provide enough electricity to service over a thousand homes.
This article provides a good primer on the pros and cons of market based approaches to reduce greenhouse gas emissions.