Pew Center report examining options for designing a mandatory U.S. greenhouse gas reduction program. Three options are specifically evaluated: (1) cap-and trade programs, (2) greenhouse gas taxes, and (3) a "sectoral hybrid" program that combines efficiency standards for automobiles and consumer products with a cap-and-trade program applicable to large sources of greenhouse gases. In addition to identifying design issues unique to each type of program, the authors evaluate the options according to the following criteria: environmental effectiveness, cost-effectiveness, administrative feasibility, distributional equity, and political acceptability. The analysis suggests that a comprehensive, upstream cap-and-trade approach (or a workable variation) and the sectoral hybrid approach are the most viable alternatives for a domestic greenhouse gas reduction program.
