The document discusses carbon trading schemes and policies to address carbon emissions in the United States. It outlines the voluntary Chicago Climate Exchange program where companies can trade carbon allowances if they lower emissions below a baseline. It also evaluates four policy approaches: command-and-control regulations by the EPA, encouraging voluntary measures through partnerships, cap and trade systems, and a national carbon tax. The document analyzes the market failures from negative externalities of pollution and how different policies could internalize social costs.