Governor Arnold Schwarzenegger, fresh off of his agreement this summer to work with the Brits on global warming, said California will create a carbon trading system in partnership with a program developed by seven states in the Northeast.

The Golden State will coordinate carbon trading with the Regional Greenhouse Gas Initiative, which includes Connecticut, Delaware, Maine, New Hampshire, New Jersey, New York, and Vermont. This arrangement enables California companies to buy and sell carbon credits with the other coast, which may not be so great for California's air if the companies there only purchase credits.

It is not far-fetched to guess that a future administration and congress will pass laws establishing a mandatory carbon trading program as concerns about climate change will pressure lawmakers. The free market folks will likely be scared into supporting a trading platform as a more open and industry-friendly alternative to enacting a carbon tax. New policy papers that outline how reducing the environmental impact of business will reinforce the rising public support.

The first carbon trading organization in the United States is the voluntary Chicago Climate Exchange, which lists members including the states of Illinois and New Mexico, American Electric Power, the Rocky Mountain Institute, and more than a hundred other organizations.

The EU started its Emissions Trading Schemein January, 2005.

So consider it inevitable that alongside of the cost of goods and labor, the cost of what industry takes out of and puts back into the environment will be factored into business decisions.