The Dec. 31 editorial “California’s climate-change experiment” did a good job highlighting some of the pitfalls of California’s cap-and-trade law. Another core problem with that law is that, while the cap on greenhouse gas emissions is fixed, the price for those emissions is not. Without a predictable price signal, the private market will not invest in the innovative solutions that would effectively slash the use of fossil fuels.
A better approach would be to impose a defined carbon tax on the fossil-fuel suppliers, with a set annual increase, and then return all the collected fees to the public in the form of direct payments or reductions in other taxes. This would protect low- and moderate-income families while avoiding the divisive question of politicians handing themselves a new revenue stream.