We will provide a background on the general economic justification for emissions trading schemes. We will discuss in some detail the results of the EU emissions trading scheme, the first phase of which is now complete. Because of the detailed data available, we will spend the bulk of our time discussing the EU experience, providing a retrospective look at the outcomes achieved and the puzzling questions that remain. We will conclude with a prospective look at the soon-to-be-implemented Regional Greenhouse Gas Initiative, an effort to reduce total carbon emissions in the US. We will draw attention especially to the differences between the US and EU schemes, mainly the use of an auction format to allocate permits in the initial phase. Such a system has been proposed by economists for many years but did not materialize as part of the EU implementation due to political pressures.