A Tax-Free Carbon Policy

In “Seven Reasons Why Taxing Carbon Won’t Fly (and shouldn’t)” I listed objections to a carbon tax and committed to describing a better, property-based carbon policy. Here are the how, who, what, where, and when of that policy. I start with “How.” “Why” is reserved for the third and last article in this series.

How. The policy is called Market Driven Compliance. MDC is an intensity-based carbon reduction trading scheme modeled after EPA’s averaging, banking and trading or ABT programs successfully controlling sulfur and benzene in gasoline and diesel for decades. Unlike cap and trade…