The U.S. Senate's inability to pass climate change legislation does not arise from its inability to nail down the particulars of a greenhouse gas (GHG) emission cap-and-trade program. While GHG cap-and-trade programs have been the centerpiece of congressional bills for a number of years, disagreement on the mechanics of such a program is not what has led to legislative stalemate. Rather the stalemate stems from: (1) the potential effect of capping GHG emissions on an already troubled economy; (2) the risk that such caps will encourage industry to relocate to other countries where emissions are not capped; and (3) the interests of states heavily dependent on coal power.

Nonetheless, it might be instructive for federal bill drafters (and perhaps the agency regulators who will draft the implementing rules) to study a handful of elements of the GHG cap-and-trade program that California's Air Resources Board (ARB) proposed last fall. There is a good reason to seek instruction. It is hard to imagine how the United States will live up to President Barack Obama's December pledge to achieve GHG emissions reductions at the percentages and on the time line he set out in Copenhagen without a federal cap-and-trade regime. Even if the ARB's proposal does not "resolve" this handful of issues, it might shed some more light on their intricacies.