by Eric de Place

A new spin on cap and dividend.

Here's an intriguing idea from California: Carbon Share. It's basically a version of Cap and Dividend (aka Skytrust) but with a twist. Instead of auctioning carbon allowances to polluters and then returning the proceeds to citizens, Carbon Share just distributes the allowances directly to citizens. Individuals can then cash in the allowances at banks or brokerages -- and the financial houses would put the permits into circulation for polluters to purchase.

I worry a bit about creating too much uncertainty for the regulated businesses. Still, it's an intriguing idea, in part because it essentially cuts out the government's role in handling the money. It's worth checking out.

This piece originally appeared on the Sightline Institute's blog, The Daily Score.

Image credit: California Carbon Share