The carbon credits thing evolved out of the American Enterprise Institute as a way to deal with industrial pollution. Later it was recognized that the carbon credit would also impact global warming due to CO2.

It amuses me that nowadays people thing it's a purely Democrat plot. At first Democrats hated the idea because it would expand wealth opportunities instead of spreading pain. Now Republicans hate it because Democrats embraced it.

It's a way to manipulate the market to address an issue ordinarily not directly within the purview of free market capitalism.