Cap-and-trade

The recently introduced bipartisan Lieberman-Warner bill, dubbed America’s Climate Security Act, would establish a cap-and-trade system for greenhouse-gas emissions. By capping emissions at proscribed levels—19 percent reduction by 2020 and 63 percent by 2050 from 2005 levels—businesses would have to trade credits to offset additional pollution, but the process outlined in the bill will give away 75 percent of the credits for free. It is unclear how it will be determined who receives the free credits, and opponents worry that the process may end up benefiting the largest polluters while smaller businesses who have already taken steps toward greening their operations lose out. Environmental groups advocated revising the way credits are awarded and increasing the percentage auctioned off so that money goes to conservation and alternative-energy projects.