If the problems in measuring the accuracy of both carbon emmissions and carbon abatement can be solved, AND if a safe global cap on annual emmissions could determined and enforced, than trading carbon credits would be feasible. Certainly that is a lot to accomplish before feasibility.

Here is the model: Let's say for simplicity it is determined 10 units of carbon abatement per company is the goal we want to reach. Company A can reduce carbon emmisions at a cost of $100 per unit of carbon abatement. Company B for a cost of $1 per unit of carbon abatement. If we regulate that both companies must reduced carbon emmissions by 10 units, the cost to society (since of course they will pass on costs to their customers) is $1010. If however company A is allowed to purchase carbon abatement credits from company B for say $2 per unit of carbon abatement, the cost to society is only $30. That doesn't even take into account the profit company B is making on the carbon abatement. This is an example of how the free market can help achieve the desired level of carbon abatement at the most efficient cost.

Again there are a number of challenging issues to be resolved before this would become feasible.