Assessing the Options for Designing a Mandatory U.S. Greenhouse Gas Reduction Program


The United States faces growing pressure – both from domestic and international sources – to adopt a mandatory greenhouse gas reduction program to address the risk of global climate change. If policy-makers decide to establish such a program, they could end up creating an environmental regulatory regime of potentially unprecedented scope and impacts. A domestic greenhouse gas program could break ground in other ways too. Many policy-makers are considering innovative market-based approaches to regulation, including a multi-billion dollar economy-wide “cap-and-trade” program. In this paper, we: (1) set forth criteria for evaluating program options; (2) analyze the leading design options and survey the academic and policy literature discussing these options; and, finally, (3) identify two potential program designs that score particularly well against our criteria.


Economics | Energy and Utilities Law | Environmental Law | International Law | Law and Economics | Natural Resources Law | Science and Technology Law

Date of this Version

April 2004