Mr. Gray and the other Bush advisers knew that the power companies  and their allies in Congress  would vigorously oppose a tax on sulfur emissions or stringent new regulations to control them. But the environmental costs of the problem were too big to ignore.

One of Mr. Bush’s outside advisers, Daniel J. Dudek, an economist with the Environmental Defense Fund, recalled that after years of unsuccessfully trying to sell the idea of setting a national limit on such emissions and letting companies trade permits or allowances to pollute, he finally came up with an analogy that broke the ice.

“I told Boyden: ‘Imagine you just fired up the government printing presses and dumped an endless stream of money into the system. You’d have no way of controlling the money supply,’ ” Mr. Dudek said. “He understood totally and intuitively the importance of maintaining the cap, the key ingredient in our acid rain policy.”

A month later, the Bush White House sent Congress a cap-and-trade plan for sulfur dioxide emissions that 18 months later became the linchpin of the 1990 amendments to the Clean Air Act, considered by many to be the most successful domestic environmental legislation ever enacted.

But the proposal came under ferocious political assault during those months. The final bill reflected a series of compromises needed to keep the coalition supporting it together. But the sulfur dioxide cap, a roughly 50 percent reduction in emissions over the next decade, held. The Environmental Protection Agency estimates that compliance with the program is close to 100 percent.

“Our proposal was at first ridiculed by environmentalists as little more than a license to pollute,” said Representative Jim Cooper, a moderate Democrat from Tennessee and an early supporter of tradable permits. “But today, few dispute it is one of the government’s most successful regulatory programs ever.”

Representative Henry A. Waxman, a California Democrat and chairman of the energy committee, and his allies are marshaling many of the same arguments for the cap-and-trade approach as they used two decades ago for acid rain. A cap-and-trade program brings support from industries that prefer it to a top-down federal regulatory scheme, they say.