A diverse array of efforts to reduce greenhouse gas (GHG) emissions is currently under way or being developed on the international, national, and sub-national level (e.g., individual state actions or regional partnerships). Proposals in the U.S. Congress have generally focused on market-based approaches, but some proposals have included a mix of market and non-market strategies. Market-based mechanisms that limit GHG emissions can generally be divided into two types: quantity control (e.g., cap-and-trade) and price control (e.g., carbon tax or fee). To some extent, a carbon tax and a cap-and-trade program would produce similar effects: both are estimated to increase the price of fossil fuels, which would ultimately be borne by consumers, particularly households. Preference for a carbon tax or a cap-and-trade program ultimately depends on which variable one wants to directly control—emissions or costs. Although Members have introduced and debated GHG emission control proposals—both cap-and-trade and carbon tax programs—in previous Congresses, the Obama Administration's stated commitment to GHG emission reduction has spurred interest in developing a workable program. This position contrasts starkly with the previous Administration, which had rejected the concept of mandatory emissions reductions, instead focusing on voluntary initiatives to reduce the growth in GHG emissions (i.e., emissions intensity targets). In addition to the policy shift in the executive branch, a number of states have taken actions in recent years that directly address GHG emissions. For example, 23 states have joined one of the three regional partnerships that would require GHG (or just carbon dioxide) emission reductions. One of these partnerships—the Regional Greenhouse Gas Initiative (RGGI)—took effect January 2009. Industry stakeholders are especially concerned that the states will create a patchwork of climate change regulations across the nation. This prospect is causing some industry leaders to call for a federal climate change program. Some have stated a preference for a cap-and-trade system; others have indicated a preference for a carbon tax approach. Another potential driver of market-based federal legislation is activity by the Environmental Protection Agency (EPA) to control GHG emissions under existing Clean Air Act authority. On December 15, 2009, EPA finalized an "endangerment finding" under Section 202 of the Clean Air Act, which requires the agency to regulate pollutants due to their GHG impacts. In addition, on May 19, 2009, President Obama announced a plan to integrate federal fuel economy standards (under the Energy Policy and Conservation Act) with federal vehicle emissions standards (under the Clean Air Act) and state standards (driven by California's rulemaking action). The Administration finalized GHG and fuel economy standards in the May 7, 2010, Federal Register . In the context of these events and efforts, Members in the 111 th Congress have introduced several proposals that would use market-based approaches to reduce GHG emissions. This report focuses on these legislative proposals. In the 111 th Congress, Members have introduced nine bills that include provisions to impose or permit some form of market-based controls on GHG emissions. General descriptions of these bills follow. The major provisions of the House bills are compared in Table 1 ; the Senate bills are compared in Table 2 . H.R. 2454 , introduced May 15, 2009, by Representatives Waxman and Markey, passed the House on June 26, 2009. It includes numerous energy policy provisions as well as cap-and-trade provisions (Titles III, IV, and V). H.R. 2454 would set up a cap-and-trade system that would reduce GHG emissions from covered sources to 17% below 2005 levels by 2020 and 83% below 2005 levels by 2050. Covered entities would account for approximately 85% of U.S. total GHG emissions. The proposal would allow covered entities to submit offsets to cover an increasing percentage (approximately 27% in 2016) of compliance obligations. Unlike previous cap-and-trade proposals (from previous Congresses), the program would create a rolling two-year compliance period. H.R. 2454 would distribute allowances to both covered and non-covered entities at no cost to support various policy objectives. In addition, an increasing percentage (approximately 17% in 2016) of the allowances would be sold through auction. As with the distribution of no-cost allowances, auction revenues would be used to further various policy objectives. S. 1733 , introduced September 30, 2009, by Senator Kerry, was ordered reported by the Senate Committee on Environment and Public Works on November 5, 2009. Largely similar to H.R. 2454 , S. 1733 would establish an economy-wide GHG cap-and-trade program, while addressing other energy-related matters through numerous energy policy provisions. Although the similarities outweigh the differences, six key distinctions include the following: (1) the Senate bill has a more stringent emissions cap between 2017 and 2029; (2) the two bills allocate emissions allowances and auction revenue to different recipients at different levels; (3) the bills would treat offsets differently; (4) the House bill would establish extensive carbon market regulation (the Senate bill currently has a placeholder for this topic); (5) the House bill would establish a requirement that importers purchase special emission allowances for certain imports from countries without greenhouse gas controls (the Senate bill currently has a placeholder for this topic); and (6) both bills would limit EPA's authority to regulate greenhouse gases under the Clean Air Act, although in different ways. For a more comprehensive comparison between H.R. 2454 and S. 1733 , see CRS Report R40896, Climate Change: Comparison of the Cap-and-Trade Provisions in H.R. 2454 and S. 1733 , by [author name scrubbed], [author name scrubbed], and [author name scrubbed]. H.R. 594 , introduced January 15, 2009, by Representative Stark, would impose a carbon-content tax on fossil fuels starting at $10/ton and increasing by $10 every year. The tax would apply to fossil fuels as they enter the U.S. economy (i.e., at the production or importation level). The bill does not specify how the tax revenues would be applied. H.R. 1337 , introduced March 5, 2009, by Representative Larson, would impose a carbon-content tax on fossil fuels starting at $15/ton. The tax would increase by $10 each year, but if identified emission targets (established by EPA, based on reaching 80% below 2005 emissions by 2050) are not met, the tax would increase by $15 in that year. The tax revenues would be used to support (1) a payroll tax rebate; (2) affected industry transition assistance; and (3) clean energy technology. The vast majority of the revenue would support the payroll tax rebate. The proposal also would impose a carbon equivalency fee on imported carbon-intensive goods. H.R. 1666 , introduced March 23, 2009, by Representative Doggett, would establish a cap-and-trade program to reduce greenhouse gas emissions from covered sources from 6.2 billion metric tons in 2012 to 253 million in 2050. The program would be administered through the Department of the Treasury and 100% of the allowances would be auctioned. In order to mitigate price volatility in the early years of the program, the bill would establish a Climate Program Oversight and Coordination Board to set targets for allowance prices and manage quarterly auctions to maintain a smooth allowance price path. The managed price program would run from 2012 through 2019, and, depending on a review, revisions would be made for 2020 and beyond. If the price path resulted in excess emissions from the expectations set out in the bill, those emissions would be made up through additional reduction in the years 2020 through 2030. Auction revenues would be put in an Auction Revenue Trust Fund at Treasury, but no specific purpose is delineated in the bill for them. H.R. 1683 , introduced March 24, 2009, by Representative McDermott, would establish a hybrid approach to GHG emission control. The approach may be described as a dynamic carbon-content tax. Producers and importers of GHG emission substances—fossil fuels and other GHG emission inputs—would be required to purchase emission permits for each ton of emissions that would occur from the combustion or use of the GHG emission substance. Permits may not be traded or exchanged, thus the purchase requirement would effectively act as a carbon-content tax (or fee). The Department of the Treasury would determine the (annual) price for emission permits based on annual emission allocations (or caps) identified in the bill. Treasury would publish price schedules every five years, but the sale price may be modified (under certain conditions and to a limited extent) within the five-year periods. If the permits sold exceed allocations allotted in a particular year, subsequent year allocations would be reduced, thus imposing an overall cap. H.R. 1862 , introduced April 1, 2009, by Representative Van Hollen, would cap emissions associated with the combustion of CO 2 . Fossil fuel producers and importers would be required to surrender carbon permits in relation to the carbon dioxide emissions generated through the combustion of fossil fuels the entities sold during the previous year. The cap would decline annually, leading to an 85% reduction below 2005 CO 2 emissions from covered entities by 2050. All of the carbon permits would be sold through an auction process. Nearly 100% of the auction proceeds would be redistributed monthly to those with a social security number. H.R. 2380 , introduced May 13, 2009, by Representative Inglis, would impose a carbon-content tax on fossil fuels starting at $15/ton.