Emissions trading brings the rules of the marketplace to environmental regulation. For example, a government trying to control acid rain might set a limit of ten metric tons on emissions of sulfur dioxide SO₂ (which causes acid rain) in a particular year. If there are 1,000 electric utilities, it might give each utility 10,000 "allowances," each of which allows the utility to emit one ton of emissions during that year. In such a timeframe, if one dirty utility is able to reduce its emissions to 8,000 tons of SO₂, that utility can sell its 2,000 excess allowances to another cleaner utility that is quickly growing and for whom it might be prohibitively expensive to further reduce emissions because its operations were already quite clean. Both would benefit from this trade because the allowance value will be higher than what it cost the dirty utility to reduce emissions, but lower than...