Not many people realize that there's already a cap-and-trade system for carbon emissions up and running in the United States. I'm referring to the Regional Greenhouse Gas Initiative (RGGI) in the Northeast, which includes a cap that came into effect in 2009 and covers CO2 emissions from power plants in ten states. True, the cap isn't very stringent—it doesn't require power plants to make any pollution cuts until 2014—but it does exist.

So how's the program doing? Sean Pool of the Center for American Progress takes a look in this new report, and the results are… well, mixed. Because the cap isn't very strict, the price of carbon is extremely low—a meager $2 per ton of emissions—which isn't really high enough to persuade utilities to change their behavior. But all of those carbon permits are auctioned off by state governments, which has allowed states to raise about $88 million for efficiency and renewable-power programs. So as a funding stream, it's not too shabby (though, in recent months, both New York and New Jersey have been talking about pilfering RGGI money to shore up their budget deficits).

Pretty soon, the cap will start tightening, prices will go up, and then we'll presumably get a better look at how well the program forces power plants to reduce their emissions. In the meantime, though, maybe the most notable thing about RGGI is that it hasn't been subject to the sorts of market manipulations or price volatility that people worry about with cap-and-trade. A recent audit found that the permit auctions have all gone off smoothly—no outsiders are leaping in and creating a carbon bubble. So that's a good sign.

And in future years, these state-level programs could prove to be very significant. Pool points to a recent analysis by Point Carbon estimating that, between programs like RGGI and the Western Climate Initiative (a separate cap-and-trade system that's being set up among a bunch of Western states and Canadian provinces), the United States could potentially meet about 41 percent of its carbon-cutting promises by 2020. The two trading program, meanwhile, are expected to raise about $100 billion over that time for public investments in alternative energy.

Those numbers are pretty striking, given that we're talking about just two fairly modest state-level programs that cover less than half the country. And it raises a question. The climate bill being cobbled together in the Senate right now will probably end up preempting state-level programs like RGGI. But if the Senate bill keeps getting watered down and punched through with loopholes in the drive for 60 votes, then at a certain point, that might not be such a good trade. These state-level initiatives are nothing to sniff at.