To lead in this effort, however, our government must strike at the source of the problem -- with reforms that only Congress can enact and the president can sign. We know that greenhouse gasses are heavily implicated as a cause of climate change. And we know that among all greenhouse gasses, the worst by far is the carbon-dioxide that results from fossil-fuel combustion. Yet for all the good work of entrepreneurs and inventors in finding cleaner and better technologies, the fundamental incentives of the market are still on the side of carbon-based energy. This has to change before we can make the decisive shift away from fossil fuels.

For the market to do more, government must do more by opening new paths of invention and ingenuity. And we must do this in a way that gives American businesses new incentives and new rewards to seek, instead of just giving them new taxes to pay and new orders to follow. The most direct way to achieve this is through a system that sets clear limits on all greenhouse gases, while also allowing the sale of rights to excess emissions. And this is the proposal I will submit to the Congress if I am elected president -- a cap-and-trade system to change the dynamic of our energy economy.

As a program under the Clean Air Act, the cap-and-trade system achieved enormous success in ridding the air of acid rain. And the same approach that brought a decline in sulfur dioxide emissions can have an equally dramatic and permanent effect on carbon emissions. Instantly, automakers, coal companies, power plants, and every other enterprise in America would have an incentive to reduce carbon emissions, because when they go under those limits they can sell the balance of permitted emissions for cash. As never before, the market would reward any person or company that seeks to invent, improve, or acquire alternatives to carbon-based energy. It is very hard to picture venture capitalists, corporate planners, small businesses and environmentalists all working to the same good purpose. But such cooperation is actually possible in the case of climate change, and this reform will set it in motion.

The people of this country have a genius for adapting, solving problems, and inventing new and better ways to accomplish our goals. But the federal government can't just summon those talents by command -- only the free market can draw them out. A cap-and-trade policy will send a signal that will be heard and welcomed all across the American economy. Those who want clean coal technology, more wind and solar, nuclear power, biomass and bio-fuels will have their opportunity through a new market that rewards those and other innovations in clean energy. The market will evolve, too, by requiring sensible reductions in greenhouse gases, but also by allowing full flexibility in how industry meets that requirement. Entrepreneurs and firms will know which energy investments they should make. And the highest rewards will go to those who make the smartest, safest, most responsible choices. A cap-and-trade reform wi ll also create a profitable opportunity for rural America to receive market-based payments -- instead of government subsidies -- for the conservation practices that store carbon in the soils of our nation's farms.

We will cap emissions according to specific goals, measuring progress by reference to past carbon emissions. By the year 2012, we will seek a return to 2005 levels of emission, by 2020, a return to 1990 levels, and so on until we have achieved at least a reduction of sixty percent below 1990 levels by the year 2050. In the course of time, it may be that new ideas and technologies will come along that we can hardly imagine today, allowing all industries to change with a speed that will surprise us. More likely, however, there will be some companies that need extra emissions rights, and they will be able to buy them. The system to meet these targets and timetables will give these companies extra time to adapt -- and that is good economic policy. It is also a matter of simple fairness, because the cap-and-trade system will create jobs, improve livelihoods, and strengthen futures across our country.

The goal in all of this is to assure an energy supply that is safe, secure, diverse, and domestic. And in pursuit of these objectives, we cannot afford to take economic growth and job creation for granted. A strong and growing economy is essential to all of our goals, and especially the goal of finding alternatives to carbon-based technology. We want to turn the American economy toward cleaner and safer energy sources. And you can't achieve that by imposing costs that the American economy cannot sustain.

As part of my cap-and-trade incentives, I will also propose to include the purchase of offsets from those outside the scope of the trading system. This will broaden the array of rewards for reduced emissions, while also lowering the costs of compliance with our new emissions standards. Through the sale of offsets -- and with strict standards to assure that reductions are real -- our agricultural sector alone can provide as much as forty percent of the overall reductions we will require in greenhouse gas emissions. And in the short term, farmers and ranchers can do it in some of the most cost-effective ways.