Carbon tax

Interesting carbon tax proposal in LATimes today. [One of the co-authors is the founder of askjeeves.com, how weird is that?].

Here's the proposal in short form:

By many estimates, a tax of about 27 cents for each gallon of fuel consumed and $30 per ton of carbon dioxide from electricity generated would be enough to an economy in which pollution is essentially rewarded to one that rewards clean technologies. This amounts to about $180 billion a year, less than 1% of the $17-trillion U.S. economy. Our carbon tax proposal is based on the principle that every consumer of fossil-fuel energy should have to pay the price of getting rid of the carbon generated by burning it. So the owner of a gasoline-powered Hummer who drives it 10,000 miles a year would pay $200 a year, and a Prius driver would pay $50. The carbon tax also would be imposed on gas or oil used to heat homes. But energy sources that don't generate carbon (such as wind, solar and other renewable resources) would not be taxed; instead, producers could sell emissions credits to carbon polluters.

The key to the plan is market based incentives. The tax money will not go to the government but to the populace:

But instead of going to the Treasury, the tax money would be credited into individual "energy savings accounts." Each taxpayer could decide how best to spend it to reduce carbon emissions, to benefit himself and the planet. You could use your $555 toward installing solar panels on your roof, cutting your electricity bill to zero. Or you could direct your tax money to a charity that plants fast-growing trees at the equator, or to a private company that would suck up the carbon in the atmosphere and sequester it under the ocean floor. You could pool your "cooling tax" money with your neighbors and build a windmill to supply your town with electricity or a plant to supply you with a non-carbon alternative to gasoline.