This past week has seen a milestone in fighting climate change. The Senate has been debating the Climate Security Act of 2008, a bill sponsored by Joe Liebermann. I-Conn., John Warner, R-Virg., and Barbara Boxer, D-Calif., that would create a greenhouse gas cap-and-trade program in the United States. While it is unlikely to pass in this contentious election year, it represents the best method to reduce the carbon footprint of the United States.

The concept behind a cap-and-trade program is simple. Companies are given credits that represent a right to emit a fixed amount of a pollutant. The total amount of credits is capped and each credit is tradable. Companies can either reduce their emissions or trade for more credits to be in compliance with the program.

The main benefit of a cap-and-trade program is that it sets a legally binding target. For example, the Climate Security Act set the target of greenhouse gas emissions at 70 percent below 2005 levels by 2050. However, it is much more flexible than most regulations because it does not mandate specific methods of reduction. Cap-and-trade provides a cost-effective manner to internalize the costs of climate change.

The United States is no stranger to cap-and-trade programs. The best known is the U.S. EPA’s Acid Rain Program. The 1990 Clean Air Act amendments authorized the EPA to create a sulfur dioxide emissions trading program to mitgate the problem of acid rain. So far, the program has reduced sulfur dioxide emissions by 41 percent while costing 50 percent less than the EPA originally estimated in 1990.

Another successful cap-and-trade program is Illinois’ Emissions Reduction Market System. The program was created to reduce the emissions of volatile organic matter, a precursor to ozone, in the Chicago area. By 2006, it had achieved emission reductions greater than 60 percent.

Both the Acid Rain Program and the Emissions Reduction Market System are part of a trend. Greenhouse gas cap-and-trade programs are being discussed and implemented all over the world. Europe is in its third year of its cap-and-trade program called the European Union Emission Trading Scheme. Australia is planning to implement its own carbon-trading scheme in 2010.

Domestically, nine states in the Northeast have created the Regional Greenhouse Gas Initiative, a greenhouse gas cap-and-trade programs starting in 2009. The Western Climate Initiative, which includes Washington, is examining a similar emission-trading program.

Even the private sector is getting involved. The Chicago Climate Exchange, started in 2003, is a voluntary but legally binding emissions trading market. Its members include companies such as Safeway and Puget Sound Energy, cities such as Portland, and even King County. As of this past Sunday, a metric ton of carbon dioxide emissions cost $7.40 on the exchange.

While there have been many suggestions on how to fight climate change, a national greenhouse gas cap-and-trade program has the brightest future. All three presidential candidates support cap-and-trade, which means that no matter who wins this November, we are likely to see such a program in the next four years. There are definitely downsides to cap-and-trade programs, such as poor implementation and price volatility. However, our previous successes in emissions trading show that these programs can and do work in the United States and that it is time we do the same for greenhouse gases.