Cap, 100% auction, 100% rebate. (and no financial intermediaries)
From Energy Intelligence:
In the short span of just a few weeks, political leaders in France, China and Japan have all demonstrated to varying degrees that they are warming to the idea of a carbon tax of some sort as a tool for reducing greenhouse gas emissions. As time runs out for countries to position themselves politically for global climate talks this December in Copenhagen, Beijing and the new government in Tokyo are taking a harder look at a carbon tax, while France's stated intention is to implement such a tax by January. The momentum promises to reinvigorate debate on the pros and cons of carbon taxes versus the cap-and-trade structure widely accepted to date.
Both schemes would aid in gradually eroding the economics of carbon-intensive fuels and better positioning low- or no-emissions energy sources such as wind, solar, hydroelectricity and nuclear. But a carbon tax, proponents argue, would be more reliable and predictable for those held accountable for emissions, such as power generators, gas distributors and petrochemical companies. It wouldn't subject participants to the volatility of carbon prices, allowing them to better plan their operations, advocates stress....MORE
Joining the widely disparate members of the Pigou Club.