Pressure has been building to pass some type of climate-change legislation since the Democrats took control of Congress in 2006. While many different bills have been proposed, none looked like they would make it into the federal registrar until last week. The draft of the American Clean Energy and Security Act of 2009 proposes the creation of a cap-and-trade program for reducing greenhouse gas emissions. While not perfect, the legislation represents a strong commitment to fighting climate change and should be passed by Congress.

Cap and trade is conceptually simple. Congress creates allowances that represent the right to emit a pollutant. These allowances are traded on an open market, and the number is reduced each year to meet the emission limit.

The United States has already been successful with cap and trade. The Acid Rain Program established in the early 1990s instituted a cap-and-trade system for sulfur-dioxide emissions. It resulted in a dramatic reduction in acid rain-based pollution and cost less than the initial estimate.

One of the biggest concerns about cap-and-trade programs is the initial distribution of the allowances. Should they be given to the polluters for free or be auctioned to raise revenue? And, if so, what do you do with the money?

In this area, the bill is not particularly good. Thirty-five percent of the allowances are given to the electricity industry, 29 percent to other energy-intensive industries such as the oil and auto companies, 20 percent to renewable energy and clean technology research, and 15 percent are auctioned with the proceeds going to low- and moderate-income families. The concern is that companies receiving allowances for free may pass the savings on to shareholders instead of consumers. State regulators will be able to mitigate some of this problem, but it would be better to avoid it in the first place.

The real tragedy is that only 15 percent of allowances are being auctioned. If more were being sold than granted, the revenue could be given back to taxpayers as a monthly rebate covering the average cost increase in their state. People paying more than the average cost would have an incentive to lower their carbon emissions to the level of the rebate. This would then drive the state average down, creating a reinforcing cycle of greenhouse-gas reductions.

While the allowance distribution is not great, the emission limits more than make up for them. The legislation sets a strict reduction schedule of 20 percent by 2020 and 83 percent by 2050, as compared to the 2005 emission levels. This represents a dramatic decrease in U.S. greenhouse-gas emissions by the middle of the century.

Strict emission limits are the prime benefit of a cap-and-trade program over other alternatives such as a carbon tax. The cap can be set to the level necessary to prevent the adverse effects of climate change. Cap and trade also seems to be more popular than a straight carbon tax.

A 2008 Yale and George Mason University survey found that 53 percent of respondents supported a cap-and-trade program to fight climate change. Only 33 percent favored a 25 cent per gallon carbon tax on gasoline.

Like any bill going through the sausage-making process in Congress, the American Clean Energy and Security Act of 2009 has its flaws. However, it represents a strong step in the right direction and has the best chance of becoming law of any cap-and-trade program presented so far. If passed, it would help make the United States a leader rather than follower in confronting the challenge of climate change.

Reach columnist Mike Noon at opinion@dailyuw.com.