No, done properly credits are the right system. Our goal is to reduce total pollution, or for more immediate pollutants, pollution in an area. (CO2 is a global thing.)

Society (government) decides how much pollution it is going to tolerate, including none. But it rarely picks "none" because the constituents aren't ready for that. Reducing pollution costs money -- if it saved money you don't need too much incentive to make it happen. You want the money spent on reducing pollution to go where it is the most effective. If you can reduce 1,000 tons of pollutant for $20 by making a factory cleaner or reduce 100 tons for $5 by doing something around your own house, it is far better for the environment to take the $5 and pay the factory. That's what a market in credits solves.

Now, the best credit systems depend on legal total emissions caps, and those caps are supposed to reduce every year. So in the first year, the government might see there is 1 million tons of pollution, and set a cap of 800,000 tons to get people to cut back. Once that is attained, the next year it might reduce the cap to 750,000 tons and so on until it reaches a sustainable level.

Instead of "Think globally, act locally" this is "Think globally, act where your action will produce an ever greater good than it would locally."

These credits create demand for whatever technology works best to reduce pollution. They don't particularly love solar or hybrid cars or anything else. They love what works. It is up to the regular world of investment for people to invest in technologies that in the future will bring good returns. That's a very well proven system.