Imagine a plan that charges polluters and puts that money into our pockets. Peter Barnes of Working Assets did:

“The simplest and fairest way to protect the poor and middle class is to give equal rebates to everyone. The money would come from either a carbon tax, or an auction of carbon emission permits…. Just as every Alaska resident receives an equal dividend from revenue from state oil leases, so every American would get an equal dividend from carbon permit auctions. The dividends would be wired monthly into people’s bank accounts, much like Social Security payments. They’d help families pay their monthly bills.

There are several nice features of such a plan. One is that it’s automatic — as energy prices rise, so do dividends. Another is that how you fare depends on what you do. The more energy you use, the more you pay. Since everyone gets the same amount back, you gain if you conserve and lose if you guzzle. This is fair to everyone, whether rich or poor. And it takes politicians off the hook for rising energy prices. If voters complain, politicians can truthfully say, “The market sets prices, and you determine by your own energy use whether you gain or lose. If you conserve, you come out ahead.”

The NYTimes DotEarth blog has an interview detailing this provocative approach to carbon caps.

Sign me up.