Some day, the United States may adopt a regulatory system to cap greenhouse gas emissions and let companies trade credits to emit such pollution. Until then, advocates for corporate sustainability must look to Europe to get a sense of how such a cap-and-trade system might work.

Since the European Union launched a cap-and-trade approach to emission reductions in 2005, carbon dealing has become a multibillion-dollar industry there; indeed, it dominates the world’s fast-growing carbon market. Last year, for example, global carbon trading increased a whopping 80 percent from 2006, with a $60 billion price tag, according to Point Carbon, a firm ...