Smoke no longer rises out of the smokestacks at the coal-fired Castle Gate Power Plant outside Helper, Utah. (George Frey/Reuters)

PRESIDENT OBAMA unveiled the final version of his signature climate change policy Monday, to aggressive attack and enthusiastic cheering. The cheering is on target: Mr. Obama’s Clean Power Plan will be the single largest action the country has taken to combat global warming. It sets an important example for other nations; draft rules on the table before Monday already had helped galvanize climate commitments from other major polluting nations.

It remains true, though, that this is a second-best plan, for both the environment and the economy. Congress left the president with no better option. In a rational world, legislators would take this as an opportunity to inaugurate a debate, not about whether the country must cut its greenhouse emissions but about how to do it better, more cheaply and for the long term.

Within the complex legal world of the Clean Air Act, the law in which the administration found its authority to regulate, the president’s plan is about as flexible as possible. The regulations assign each state an emissions target but allow each to design its own program to achieve the target. State plans will accelerate a move away from coal-fired electricity, the dirtiest kind, and toward cleaner natural gas and renewables, along with more energy efficiency. States that act in good faith but can’t meet the deadlines without endangering the reliability of their power grid will be eligible for waivers.

Most important, the president’s plan encourages states to create rudimentary market-based emissions programs in which companies can buy and sell pollution credits. This is the most efficient way to reduce pollution, ensuring that emissions cuts happen where they are cheapest to attain. States could join interstate greenhouse-gas trading blocs or they could allow companies within their borders to participate in interstate trading without such a formal move. State leaders should look at these options and begin talks with each other sooner rather than later.

The rules will reduce emissions from the electricity sector by 32 percent by 2030, which will be like taking 166 million cars off the road, according to Environmental Protection Agency figures. The EPA also reckons that benefits will significantly exceed costs.

What are the drawbacks? First, the plan covers only one sector — power generation — which accounts for a third of the nation’s greenhouse emissions. Other policies cover other sectors (transportation, for example), but a comprehensive approach would be more efficient. Second, the plan is only a medium-term policy, when some of the hardest emissions-cutting work will have to come after 2030. Third, the plan is complex and requires close supervision from Washington, when policies that rely less on federal mandates would be simpler and almost certainly cheaper.

Congress could address all three failings with a simple, economy-wide, market-based, long-term strategy that could credibly replace the president’s Clean Power Plan. A federal carbon tax or a national carbon trading program would do the trick. Until and unless critics of the president’s plan get behind a policy like that, their attacks will remain unconvincing.