Carbon Offsets Daily

The Lieberman-Warner bill, which proposed the establishment of carbon cap-and-trade might have hit a dead end, but have started to come to the fore. The that is being promoted by NASA's James E. Hansen - a renowned climate scientist, is a case in point. Dr. Hansen recently at the Inspired by Peter Barnes' cap-and-dividend system, its basic principle is as follows: the system would levy a tax on coal, oil and gas and the total tax revenue garnered  would be distributed equally among taxpayers. The implication - if  your energy consumption is above the average (read your tax payment is higher than average), you will be penalized to the extent of the difference between your tax payments and dividend receipts. Conversely, a lower than average energy usage would be rewarded. Thus, the system offers financial incentives for reducing carbon use.

Though likely to generate its share of controversy, Hansen claims that the tax-and-dividend strategy will be more effective and when compared to other tax-imposing alternatives, it is likely to be met with greater public acceptability (or at least confronted with lesser public hostility), as the tax revenue would be given back to the taxpayers.

What are your opinions? Do you think the tax-and-dividend strategy has the potential to discourage carbon use?