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Many states have been in the forefront in implemention programs to reduce carbon dioxide emissions, including regional cap-and-trade programs. A major issue Congress will need to address in any federal climate legislation is the future role of state programs that are already underway. One of the key questions is whether Congress will allow states to have more stringent reduction targets. This paper provides an overview of some of the key isuses regarding state–federal roles in a federal climate program and identifies four possible mechanisms that have been suggested for allowing states to set more stringent reduction targets.