How hot is the idea of trading carbon emissions to limit global warming? Hot enough that Goldman Sachs purchased 10 percent of the Chicago Climate Exchange.

The Exchange (CCX) is a voluntary greenhouse gas emission trading system where companies promise to reduce emissions, and they can buy or sell credits. If a company reduces more emissions then it pledged, it can sell the surplus to other organizations.

Goldman acquired shares in CCX as well as ownership of its European counterpart, which is part of a mandatory carbon trading system. I'm guessing Goldman thinks that the Exchange, or the technology used for trading shares, could be used if the U.S. ever mandates emissions trading.

California recently passed the Global Warming Solutions Act of 2006 that will force industry to reduce emissions starting in 2012. The law includes a system whereby companies that can't meet the tougher standards will be able to buy credits, and CCX assist in organizing the trades.

California's law will spur the biggest cross-industry boom in technology investment since the Y2K scare, so tracking the leading players in reducing emissions and the financiers starting today makes sense.