The Right to Pollute

There is such a body as the Chicago Climate Exchange. I've just been listening to a story about it on the BBC News radio station. This body exists to sell the right to pollute. What the ... ?

The way it works, if I understand it correctly, is Alpha Inc. is allowed to emit X amount of pollution per year. If they think they are going to have higher pollution emissions than X, they can "buy" extra pollution emission rights. If they don't use all their extra pollution allocation purchased, they can sell those emission rights on to Beta Inc.

Now I've heard it all. I prefer the idea that companies are penalised for extra pollution emissions rather than they are allowed to purchase the right to pollute. This might be splitting hairs and purely semantics, but it's the principle of the thing. Capitalism definitely has it's good points, but this is ridiculous. It makes it sound as if pollution on a major scale is no big deal.