Concerns over climate change in the U.S. are prompting actions at the federal, state and corporate levels that will affect how industrial facilities operate now and in the future. Because a comprehensive federal carbon policy is still in its infancy, some states are implementing their own carbon policies and setting their own reduction targets ahead of federal regulations. For example, California's climate change mitigation plan requires a reduction of 80 million metric tons of CO2 equivalent (MMTCO2eq), or a 16% reduction, from the state's projected 2020 business-as-usual emissions. A significant share of the required reduction will come from a cap-and-trade program, a program that directly affects industrial operation in the state. This article discusses the impact of federal and state policies on the operation of industrial facilities. It addresses the three primary steps that industrial facilities are currently taking to address or prepare for carbon policies: monitoring and reporting of greenhouse gas (GHG) emissions, managing GHG emissions, and preparing for participation in cap-and-trade programs. The article begins with an analysis of the industrial sector's contribution to total U.S. GHG emissions in the last 20 years. This is then followed by an overview of federal and state climate policies affecting industrial operations. Recent regulations on mandatory GHG emission reporting and permitting at the federal level are discussed. The comprehensive statewide cap-and-trade program in California is also described, as it will greatly affect industrial operation in the state. Finally, the article concludes with examples of GHG strategies and actions taken by industrial subsectors and individual companies to better position themselves for carbon policies at home and abroad.