One attractive element of a cap-and-trade system for reducing greenhouse gas emissions is that it would permit entities other than firms to buy credits, which they could then choose not to actually use. For example, a cap-and-trade system might mandate that emissions in 2020 return to 1990 levels and require that all credits be auctioned, rather than issued for free to past polluters. In Canada, that would mean selling 596 million tonnes worth of emission permits.
Firms wishing to emit greenhouse gasses would then need to buy permits for whatever quantity they choose to emit. Given the cap on the total number of permits to be sold, the price of permits will rise to the point where a sufficient number of emissions are cut. Because of the economic incentive produced to cut out whichever emissions within the economy would be cheapest to eliminate, the overall cost of compliance is minimized.
If, however, groups exist that feel that cuts deeper than 1990 levels by 2020 are required, they could buy permits on the same market. In so doing, they would reduce the supply available and increase the price of those remaining. This would induce firms to eliminate emissions where the cost per tonne is between what the price of permits would be without this independent action and what the price has become along with it.