WE ARE ALL PIGOVIAN NOW

It works like this: A government charges a fee per ton of greenhouse gases emitted. The fee is small at first, rising gradually to give companies a chance to adapt. Individual households don't get taxed directly, but they could take a hit when the big emitters raise their rates in response.

"The beauty of a carbon tax is that everything we want consumers to do gets incentivized to be done," says MIT economist Christopher Knittel. Residents pay more attention to their thermostats. Utilities might invest more in solar or wind farms. Manufacturers could start offering more energy-saving products, such as more efficient cars and heating and air-conditioning systems.

Several countries have implemented some form of carbon pricing--just not the most-offending nations. After Sweden instituted a tax in 1991, its transportation emissions fell an average of 6 percent a year, according to one study. (A separate tax on transport fuels shrank the country's carbon footprint further.) In British Columbia, a carbon tax reduced emissions by up to 15 percent. Last year, after the province's experiment proved successful, Canada expanded carbon pricing nationwide. Researchers at MIT calculated that if the US placed a $50-per-ton tax on carbon and increased the tax 5 percent per year, emissions would drop 63 percent by 2050. If every country adopted a carbon tax with a similar effect, the world might be able to slash its emissions in half by the middle of this century.

The idea that has lately taken off among certain conservatives is one that cuts the sourness of a carbon tax with some sweeteners. US representative Francis Rooney, a Florida Republican, has cosponsored legislation that would impose a fee on metric tons of carbon emitted and then distribute the spoils back to US residents as a monthly "carbon dividend." (You could think of it as a form of basic income, the concept that helped make Andrew Yang one of the biggest gang leaders in America over the past year.) In one proposal, crafted by the bipartisan Climate Leadership Council, a family of four might expect to get $2,000 back in the first year. 

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