Cap and Dividend?

I got an email today about a campaign I hadn’t previously heard of pushing what they call a “cap and dividend” approach to climate change. The basic idea is for a cap-and-trade system with 100 percent of the carbon permits auctioned and 100 percent of the auction revenue rebated to the public on a flat per capita basis. In essence, everyone with a larger-than-average carbon footprint would be subsidizing everyone with a smaller-than-average footprint. This idea has a lot of merit to it in my view, including the fact that it’s simple to explain what the plan is and also pretty simple to explain why it won’t have a devastating impact on your family. Another virtue is that it should be progressive in distributional terms. The main problem on the merits that I can think of is that this would probably have widely disparate regional impact in a somewhat unfortunate way.

Somewhat more interesting is that there’s about no chance of this happening. In theory, this is the kind of solution to climate change that conservatives should be pushing for — skeptical of government planning and peddling, it’s a simple, pure, pristine econ 101 approach. And from an ideological point of view, there should be no kind of regulation that’s less controversial than regulation of air pollution — since the air crosses all property boundaries, it’s the kind of regulation that’s least susceptible to arguments about the illegitimacy of restrictions on property rights. But not only do most conservative institutions and politicians not embrace something like the “cap and dividend” vision, as best I can tell none of them do. It’s a very clear signpost of the essentially corrupt and malign nature of the conservative movement.