While emission credit based systems are easier to create, the transactions cost per trade are high. Consequently, they are easy to experiment with but difficult to establish if many trades are expected (See GERT and PERT programs for Canadian examples).

Quota-based systems, on the other hand, are expensive to develop but provide for a more active trading market, more simple hedging instruments, and greater liquidity than do credit-based systems. To implement the SO₂ allowance-trading program, the US Environmental Protection Agency required hundreds of pages of regulatory language be drafted. From its inception in 1989, more than 30 people per year have been working within the US EPA developing and implementing the program. In addition, it has cost much more than $50 million – an astronomic sum for some countries. 

What is the bottom-line? In the US, we are wealthy and experienced, and we have iterated to a solution. When possible, we want to develop quota-based systems. They are cost-effective if we expect many trades; otherwise, credit-based systems seem to make more sense.

However, this result may not apply in other countries. Having offered a cautionary note, there is a hidden asset that should make diffusion of both emissions credit and emissions quota systems faster in both North America and elsewhere. Moreover, that asset is very powerful. That asset is you.

Because of a wealth of experience within the regulatory community and among emission traders, it is now more likely that we can diffuse emissions trading concepts to new circumstances like "green tags", greenhouse gas trading, or transnational trades of long range transport pollutants.

It is upon this North American asset and institutional base that other countries now base their trading programs. Nothing creates success like success. EMA members both serve their parochial interests and, from my point of view, a legitimate public policy goal, to assist other countries learn about and adopt trading-based environmental programs. Active EMA members, our conference series, our trading handbook, our volunteerism to assist visiting regulators and scholars all contribute toward diffusion, more rapid adaptation, and better environmental results. That is not a bad result for a simple concept, a professional society, and its members.