Supporters of the bill say its key component is an iron-clad cap on the nation's emissions that drops over time. They said it doesn't matter how allowances are distributed. The environmental goals depend on having a strong cap and a time horizon to encourage innovation," said Nathanial Keohane, an economist at the Environmental Defense Fund. "That's what we see in the bill."

But to individual companies, states and regions, the way the allowances are handed out can matter a great deal. "From an environmental point of view, it doesn't matter what you do with the allowances," said Ralph Izzo, chief executive of Public Service Enterprise Group, a New Jersey-based utility. "From an economic point of view it sure as hell matters." (Izzo supports the bill.)