First, impose a carbon tax that is greater than the cost of carbon sequestration or capture, or that brings the cost per kw of coal-fired electricity to parity with wind, solar or geothermal. That is a direct market-based model with no room for manipulation. Downside? Persuade consumers to pay two to five times more for electricity. The capital cost per kw of a natural gas plant is about $600 (still emits carbon); the capital cost of a pulverized coal plant is about $1200 (still emits carbon. The capital cost per kw of wind is about $2500, geothermal and solar about $3000. Maybe that cost comes down over time, but it probably doesn’t (the main cost component is construction cost and labor, rather than technology cost, and the last I checked unions were not advocating lower wages for working harder). That fixes electricity.

Second, you need a separate carbon tax on gas at the pump for tailpipe emissions, so it is cheaper to buy a hybrid and replace the batteries than it is to drive a normal combustion engine. $5-$6/gallon gas should do it, but maybe that’s moderated over time by falling demand for foreign oil.

Third, you’ll need a carbon tax that pays for capture of CO2 for the other emitting industries – concrete manufacturing, chemical plants and so on. No real way to moderate this.

Finally, you need to impose a tariff on imported goods from China and India, to level the playing field — so we can all enjoy paying higher prices at Walmart, Target and Amazon.

Bottom line, a carbon-reduced economy costs money and consumers have to pay for it. Far more efficient for consumers to pay corporations the cost of reducing their carbon footprint than for everyone to pay taxes to the government to be reallocated, at least somewhat arbitrarily.

It really does seem that the bill makes an attempt to satisfy everyone — especially with the emergeny offramp… hmm. WOW almost 2 trillion to consumers! The “double counting” for certain initiatives, as you put it, is a little unsettling and it is amazing to me how they allocated all of the money.

It is also striking that the renewable energy workforce training program receives almost $200 billion, while research, development & deployment of renewable energy technology is less than $20 billion. Are all of these states and industries supposed to use their hundreds of billions of dollars in transition assistance to switch to using EXISTING low-carbon energy sources/renewables? (this is an honest question, not rhetorical.) If so, could you name what you think they are?

Also, how lame that CCS receives ALMOST as much money as “advanced energy research.” CCS should be lowest on the totem pole in terms of investment/deployment; it’d be nice to see some more money thrown at weening us off of carbon intense fuels and creating a sustainable future, rather than burying our carbon and continuing the same fossil fuel lifestyle.

It looks like those who truly care about a certain result–capping GHGs–have totally lost their souls to the political process. They wanted “cap” but thought they could agree to “CAP and trade.” What harm could that do? But it became “cap and TRADE,” and still they were for it. Relax, just a matter of emphasis. Then it became using the money to help the supply side to build constuencies for “cap and TRADE.” Gotta hold our noses and be realistic–besides we could use some of that money ourselves. Now it has fully evolved into “TRADE and PORK,” and something like this will eventually pass.

In the 1970s I was chief environmental officer of an energy company that had 4 refineries, including 2 in California. In those days, before they lost their souls, environmentalists and regulatory agencies just set caps and gave us no money to meet them. And you know what? It worked just fine. The job got done, and we didn’t go broke because of it. Also the CAFE standards worked really well as a floor for fuel economy after gasoline prices went way down in the mid-1980s and 1990s. Building efficiency standards and appliance efficiency standards worked well also.

When government gets away from governing and tries to negotiate financial arrangements with business people, government is going to get its lunch money stolen and be pantsed in the middle of the playground. California electricity deregulation is the model, not the exception.

The idea of “emergency off-ramps” and “borrowing” is ripe for abuse. In the 1990’s, U.S. car companies essentially disregarded California zero emission mandates and federal fuel efficiency standards by postponing legislative mandates. Putting such devices into the climate bill itself formally accepts the possibility of such procrastinating behavior.

While cap-and-trade works in theory, I’ve been skeptical that it would work in practice. Cap-and-trade is an economic (”market forces”) model of emissions regulation, and thus, subject to all of the economic shenanigans that are so often exercised in the financial industries (anybody remember subprime mortgages?).

If we’re going to make cap-and-trade work, we have to eliminate loopholes and make the rules clear and simple.