A method for reducing greenhouse gas emissions by promoting more efficient energy use, by establishing a measure of efficiency, defined as a ratio of a measure of energy use to a measure of production; establishing a reduction schedule that sets limits on the energy efficiency ratio, with the schedule covering a series of compliance time periods and requiring efficient energy use during those time periods; establishing a transferable credit representing an amount of energy and establishing a tradable financial instrument representing a number of energy efficiency credits; issuing a plurality of energy efficiency credits to the entities; establishing a trading system to facilitate the sale and purchase of the financial instruments; and requiring entities to comply with the reduction schedule by making operational improvements or acquiring and surrendering credits to thus increase the efficiency of energy use in turn reducing greenhouse gas emissions.