The reviews are mixed. In the Los Angeles Times, Todd Darling writes:
The bill…proposes a market-based “carbon trading” plan that mirrors a European system initiated in 2005. This plan requires polluters to obtain government-issued “carbon credits,” which then allow them to pollute above the agreed-on limit….the Waxman-Markey plan…gives 85% of the pollution credits to the biggest polluters for free….
In Europe, the distribution of free pollution credits to industries failed to establish a strong carbon market. In turn, the weak market in carbon credits failed to generate the money needed to fund new technology. And because there was a glut of free credits, polluters that went over the emissions limit could buy the necessary credits cheaply. So important states, such as Britain, continue to exceed the pollution limits.
Faced with disappointing results, Europe began auctioning off more of the credits in 2006. But the damage was done….The complex European trading scheme, started with free pollution credits, has not produced dramatic cuts in pollution or dramatic developments in technology or a robust market in carbon credits. The Financial Times of London was blunt: “Carbon markets leave much room for unverifiable manipulation. [Carbon] taxes are better, partly because they are less vulnerable to such improprieties.”