"For decision-makers considering actions to address climate change, an assortment of policy instruments is available; studies suggest that a combination could be most effective in achieving various climate policy objectives. Current domestic policy attention has focused on "cap and trade" strategies to reduce GHG emissions, with additional policy tools aimed at promoting the technology development considered necessary to slow climate change significantly. In parallel, growing attention is being given to characterizing and supporting adaptations to expected future changes, as well as to strategies to gain effective international engagement in reducing GHG. One significant obstacle to consensus is concern about the potential costs of abating GHG emissions, since deep reductions would require extraordinary changes in energy use and technologies. Recent studies suggest that efficiently designed GHG programs could moderate the costs of reducing U.S. GHG emissions; technically and politically, though, an "efficiently designed" program may not be realistic. Policy options can ease the adjustments required and modify the distribution of costs -- or potential wealth embodied in distribution of emission allowances -- across specific sectors or populations. A core challenge of policy design, then, is balancing the climate effectiveness of a policy, the economic costs, and its distributional effects."
CRS Report for Congress, RL34513