The federal Clean Power Plan gives each state the flexibility to use its own ideas on how best to reduce greenhouse gases from the power sector. One proven, cost-effective approach is to use market forces to drive innovation and efficiency.

It worked before to curb acid rain. It’s working now in California and the nine states in the Regional Greenhouse Gas Initiative. And it can work again with the Clean Power Plan.

The options available to states go beyond creating or joining a cap-and-trade program or instituting a carbon tax. Pieces can be put in place, such as common definitions, measurement and verification processes, so that states or companies could be in a position to trade within their state or across borders. Modest programs that allow companies to trade carbon credits could be explored.

In an op-ed published in The Hill, Anthony Earley, CEO of California energy company PG&E, and C2ES President Bob Perciasepe urge states to give these options serious thought.

Read The Hill op-ed.