In weeks of closed-door negotiations with these Democrats, Mr. Waxman doled out billions of dollars worth of free pollution permits, known as allowances, to cushion any price shock caused by imposing a cap on emissions of heat-trapping gases.

In the end, 85 percent of all pollution allowances were given at no cost for various purposes, including compensating energy-intensive industries, state governments, oil refiners and low-income households, at least in the early years of the program. Mr. Obama’s position during the presidential campaign was that all of the permits should be auctioned, not given away, but the White House did not object to Mr. Waxman’s generous allocations.