I have posted an essay on carbon trading and the problem of enforcing program-wide emission caps on my website. (http://www.vermontlaw.edu/faculty/tyang) It is entitled "The Problem of Maintaining Emissions “Caps” in Carbon Trading Programs Without Federal Government Involvement: A Brief Examination of the Chicago Climate Exchange and the Northeast Regional Greenhouse Gas Initiative." My bad for the long title, but I like to have the title be reflective of the content. The essay is based on a presentation I did for a climate change symposium at Fordham law school last spring and looks specifically at the Chicago Climate Exchange and the New England Regional Greenhouse Gas Initiative. Any comments are welcome.
There was a related article in the New York Times Magazine a couple of months ago, "Capital Pollution Solution?," by Jeff Goodell (July 30, 2006). Unfortunately, I can't link to the story since the NY Times website requires payment for access. Overall it was a very good article on the Chicago Climate Exchange (CCX). The CCX is essentially a voluntary carbon trading arrangement, which includes large companies like International Paper and BP. However, the article was inaccurate in asserting that the commitments of CCX members are unenforceable. In fact, like other private contractual schemes, failure by a member to comply with their emissions limits could be enforced through the CCX's provision. Of course, whether that has ever happened is quite another matter.