Sir, The European Union carbon trading schemes introduced in 2005, outlined in the article "Carbon trading grunts into life' (April 2), saw limited emissions trading conducted among a handful of large companies, and was used primarily as a training exercise. The second period will fully integrate emissions trading with other commodities, and a whole new set of rules will apply. While we have been hearing a great deal about their technical risks to a well-functioning trading market, introducing emissions into the commodities market will raise a number of business risks such as market distortion and delocalisation, both very real considerations for business leaders cultivating a strategic plan to engage in this second wave of carbon-trading schemes. Finally, with a shortage of credits likely, the volume of trading and prices will skyrocket in the second phase of EU emissions trading. Currently, companies taking advantage of carbon trading are doing so because it is a relatively low-cost abatement solution. However, as the price of carbon steadily creeps up, smart companies will begin moving away from emissions trading as nothing more than a short-term solution and increase investment in innovative technical solutions to reduce emissions and ensure their businesses' sustainability in the medium to long term. Davide Vassallo, Arthur D. Little's Sustainability and Risk Practice, 00185 Rome, Italy Copyright The Financial Times Limited 2008