You're right that transportation is a major source of GHGs — in the U.S. transportation is roughly 30 percent of all global warming pollution. USCAP (EDF is a member) has a blueprint for legislation that puts transportation fuels under an economy-wide emissions cap, ensuring that we get needed reductions in the trans sector. You can read more about that in the blueprint: http://us-cap.org/pdf/USCAP_Blueprint.pdf.

On your second question, Congress has yet to decide among the many options for how to distribute allowances.

(1) How does cap and trade apply to the transportation sector? That sector is also a major source of GHG.

(2) Will allowances be allocated to electricity suppliers based on the amount of energy supplied to the market, or on the amount of GHG they produce? The former rewards those with relatively clean energy portfolios, while the latter rewards those that are heavy polluters.