program with regard to carbon emissions for electrical
power generation. The Economic Report of the President
states:
Electricity generators would receive credits for each
megawatt-hour of clean energy generated; utilities
with more credits than needed to meet the standard
could sell the credits to other utilities or bank them
for future use. By ensuring flexibility through a broad
definition of clean energy and by allowing trading
among utilities, the program is designed to meet the
overall target cost-effectively. The Administration’s
proposal emphasizes the importance of protecting
consumers and accounting for regional differences
(Obama 2011b).An analogous type of cap-and-trade system was
put in place by the 1990 Clean Air Act for sulfur di-
oxide and nitrous oxides, which successfully achieved
national goals with regard to curtailing acid rain in
the United States (EPA 2009). Such a system can en-
able meeting the President’s 2035 goal by allowing
market forces to have a greater impact in picking the
optimum combination of technologies and processes,
as they did in the case of acid rain. However, without
the Federal CES for electricity, market forces would
arrive at solution that is very like the status quo or
inefficiently react to a patchwork of uncoordinated
state laws, hence federal government action is likely
needed. To further this point, the Economic Report of
the President offers:
The benefits of transitioning to clean energy—energy
security, cleaner air, fewer risks from climate change,
and enhanced economic competitiveness—are enjoyed
by everybody, not just the producers or consumers of
the clean energy....These spillovers mean that market