Because the cheapest opportunities are likely to be exploited first (absent other barriers), abatement costs are minimised by the pricing of emissions. This is all the more important at the international level, where there are large differences in marginal abatement costs across countries. The power of pricing to minimise abatement costs has been amply demonstrated in the United States through experience with the cap-and-trade scheme to reduce sulphur dioxide (S02) emissions in the electric-power sector (and hence acid rain) introduced in 1995. It has resulted in almost a halving of these emissions and compliance costs are estimated to have been 30-40% lower than would have been incurred had the command and control regulatory approaches considered by Congress instead been adopted (Stavins, 2005 and 1998; Carlson et al.,