S.1766 would create an economy wide cap-and-trade program for greenhouse gas (GHG) emissions. Under the Act, CO2 emissions from petroleum and natural gas would be regulated upstream.

For these fuels, regulated entities would be required to submit allowances equal to the carbon content of the fuels produced or processed at their facilities. GHG emissions from coal would be regulated downstream at the point of fuel consumption, and the regulated entities that would be required to submit allowances would include: coal-consuming facilities and producers and importers of non-CO2 GHGs.