The market is a much more efficient tool to reduce carbon emissions than command-and-control regulations. The downside is that it's more transparent about the costs it imposes. Regulation attacks the problem less efficiently, but the costs are entirely hidden. So that's the direction policy is going, points out David Leonhardt, even among supposedly market-loving Republicans:

Accepting higher costs is especially hard when the economy is weak. So Congressional Democrats have been repackaging their energy bills to make them look less and less market-oriented. Senator John McCain, who supported a permit system for carbon as the Republican presidential nominee, no longer does. Senator Lindsey Graham, the South Carolina Republican, has reversed his position as well.
What does Mr. Graham now favor? A series of command-and-control regulations. He has introduced a bill with Senator Richard Lugar, an Indiana Republican, that would mandate specific standards for cars, trucks, homes and offices. It would also give the energy secretary the power to award loans to companies he thought could do a good job of setting up programs to retrofit buildings. State officials would do the same for factories. The bill, in short, puts more faith in government than the market.

Better than nothing? Absolutely.