Policy paper discussing the need in the short to medium term for a cap and trade system in the United States. The proposed cap and trade system includes an upstream cap on CO2 emissions with gradual inclusion of other greenhouse gases, a gradual downward trajectory of emissions ceilings over time to minimize disruption and allow firms and households time to adapt, and mechanisms to reduce cost uncertainty. This proposed program would initially give away half of its permits for free and auction off the other half.