No matter who takes office in '08, whether its Obama, Hilary, Rudy or John, stronger environmental legislation is coming.

President Bush might have decided against supporting the worldwide Kyoto Treaty but now both sides of the aisle agree something needs to be done.

Even corporate America is getting in on the act, literally.

Just this month, ConocoPhillips (COP), the third-largest US oil company, became the latest major corporation to support limits on greenhouse gases.

Under the legislation likely to be formed, oil and power companies will be forced to use cleaner burning technology to reduce the carbon they release in the air or they will have the option to purchase so-called carbon credits in an open market system.

In other words, they can keep polluting... but it will cost them. Similar emission credit markets are already in place in Europe. So who will the biggest winners and losers be?

Dylan Ratigan spoke with Paul Fremont, Jeffries Utilities Analyst – he’s one of the top analysts in the utility industry for the answer.

Fremont says “companies in the electric utility sector which are best positioned to benefit are nuclear and hydro generators….nuclear players will essentially be given carbon credits that they can sell into the market and realize additional gains.”

So while the carbon caps are still at least a year away -and the details are still hazy the trade is unfolding right now.

Dylan Ratigan says companies that have joined the US action climate partnership to reduce greenhouse gas emissions include Pepsico (PEP), The Dow Chemical Co. (DOW), AIG (AIG), Deere & Co (DE), Boston Scientific (BSX), Johnson & Johnson (JNJ) , and ConocoPhillips (COP).

According to Eric Bolling the carbon caps failed in Europe. He adds if you slap this on American corporations it will be so onerous, they could move to Europe.

American companies are going to move to Europe for environmental standards? - says Dylan with disbelief

Tim Strazzini thinks carbon caps will be implemented in a different from – and that will take a while.

Jeff Macke says the trade is PG&E Corp. (PCG) because they’re a utility that’s already had to work toward tougher California stadards and that gives them a competitive edge.

Guy Adami recommends looking at companies such as Fluor Corp (FLR) because they build nuclear power plants and Evergreen Solar (ESLR) as an alternative energy play.

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Trader disclosure: On May 9, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders Strazzini Onws (CMLS) Bolling Owns (NMX) Gold, Silver, Sugar, Coffee Bolling Is Short Crude Oil