In addition to the "best practice" activities related to energy technology and energy management discussed in the previous sections, emission offset and trading actions are also available to reduce GHG emissions. These actions employ a market mechanism to achieve the required reductions by exchanging emission credits/allowances between entities that "overcomply" with those that "undercomply" in response to either a unit level requirement or a regional emissions cap (bubble).

Such offset and emission trading actions can supplement the emissions reduced/avoided by best practices, or facilitate the flow of capital to fund such actions. While such offset and emissions trading actions might involve improvements in the efficiency of generating, transmitting, distributing, and consuming electricity, they are typically undertaken by a third-party. The third-party sells the offset/allowance to an entity that has a marginal cost of control greater than the price of purchasing the offset/allowance.