One of the little-known facts about cap-and-trade is that individuals are allowed to buy and trade carbon credits just like corporations can.
It's the same as buying and trading a stock through a broker, but in this case individuals would do so through brokers that specialize in environmental credits.
Take California's first historic cap and trade auction last November. After registering with the California Air Resources Board, any US citizen could have participated. Once an investor buys credits they can be traded or sold the same way as any stock.
In California, each credit represents one metric ton of carbon dioxide. Right now, they are trading at about $15 each, but during the auction they sold for $10.09.
The idea is that as California tightens the cap on greenhouse gas emissions, those credits will rise in value.
So far, few individuals have jumped in, but as the market matures, it could be viewed as a new investment vehicle. Of course, the price can go down as well as up, as has been true of cap-and-trade for acid rain.
Because the program has been so successful in reducing sulfur dioxide emissions, credits that cost $1600 in 1995, now are worth just $1.25.
In the early years, individuals and environmental groups purchased credits, not to trade them, but to retire them, which took those credits off the market. The same could be done with carbon credits.
California's next carbon auction is scheduled for February.
Regardless of whether individuals invest, California residents will receive a share of the proceeds in the form of credits on their utility bills.
Here are details about California's cap-and-trade program.