[chris_va]

(disclaimer: I am part of a Climate&Energy research group that does some economic modeling of this sort, though this particular solution is still being researched)

> We do not need to reinvent our economic systems, we just need to push back against the political power of a few established special interest groups that want to protect their current profit.

Ironically, with some of the better solutions (e.g. a Carbon Tax), fossil fuel companies may not actually see reduced profit, but that is not well understood by the industry since the reason is slightly subtle.

Since energy demand is relatively inelastic, increasing the price only slightly decreases consumer demand. While that by itself is technically a loss for energy companies, a sensible carbon tax also creates a secondary market to dispose of CO2. The majority of the additional consumer cost of energy is actually paying that secondary market to take the CO2. It turns out that disposing of CO2 is primarily an energy cost, which means the net demand for things like natural gas can actually go up.

At the moment, my personal favorite solution is to implement a "Carbon Rebate"--basically a revenue neutral tax. You tax CO2 emissions (probably at the source), and create a secondary market to offset emissions to avoid paying the tax. Any revenue from the tax is uniformly redistributed to consumers (perhaps as a tax credit), and you have the "tax" rate ramp up year over year. This establishes price discovery and creates an economic incentive to solve the problem without being significantly disruptive to either the industry or consumers (and somewhat exploits the prisoner dilemma). From a US-centric viewpoint, trade agreements would be required to enforce this tax on goods imported from other countries that are not subjected to an analogous carbon price. Since the import tariffs money would be redistributed to US citizens, it creates an incentive for those countries to adopt a similar policy.

[dougmwne]

Interesting proposal. Thank you for your work on this! Carbon emissions seem to be a classic tragedy of the commons and I believe the only effective way to prevent a tragedy of the commons is through better governance. Creating these kinds of promising new policies is one half of the solution, activism to generate the political will to enact them is the other half. (Disclaimer: I work on the activism side. We haven't given up and neither should any of you)