If you want some detailed blog analysis of the Obama administration’s cap-and-trade package—and you should—check out Brad Plumer and Dave Roberts. For my part, I was initially puzzled by the linkage of carbon permit auction revenues to the administration’s Make Work Pay tax credit. But then I thought about it again on the Metro and it made more sense to me—it lets you characterize the proposal as a tax cut for working people financed through a tax on polluters.
The trouble with the plan, of course, remains what it’s long been namely that “my best guess is that Obama’s climate proposals are too ambitious to be enacted and too timid to avert catastrophe.” In other words, this is a good proposal. But it’s not good enough to avert catastrophe. And it’s overwhelmingly likely that to get it passed through congress it’ll have to be watered-down.