"The problem is, that's not really a solution at all unless it results in greenhouse gas emissions significantly decreasing. The free market cannot solve this problem. "
Yes and no Jamie. *If* carbon credits are structured in such a way that the emission of carbon has a definite cost associated with it, then the supply and demand curve changes.
For example, right now it is far less expensive - in the short and long run - to run a coal power plant than any number of renewables or nuclear. If, on the other hand, a tax on carbon is enacted (and that's basically what 'carbon credits' are), then the cost per kilowatt jumps. If it jumps high enough, then other, carbon neutral solutions become feasible.
The downside to this, of course, is that the public is used to paying X per kilowatt hour, and they'd inevitably have to pay Y were carbon taxed - even if every carbon producing plant was closed tomorrow, renewables in general are more expensive today, and there is only so much economies of scale can do to bring that down.
Politicians tend to be loath to spread pain to the voters, lest they lose their jobs, so while the economics of the issue are plain, the politics are such that getting a carbon tax passed would be... challenging