Hi Kemal and Karim,



It is the best idea in the world, and as you rightly point out, the best time to implement a (variable) carbon tax is now.



However, I have my doubts that any government, anywhere in the world, is up to this task. Maybe the Nordic countries could get this done pronto, but that's it.



Were Ike Eisenhower still in office it would be done by the weekend.



Political gridlock and a 'Can't Do' attitude, is why we are slowly losing traction compared to the trajectory the Western nations were once on.



And it is why we are far underperforming vis-à-vis our competitor nations.



Western leaders need to embrace visionary ideas and leaders must lead and not be made to apologize for bringing new policies forward -- and just get on with it!



There is far too much chatter about bombing missions and other things that are far less important than policies that help us to economically excel. And energy is one of those sectors with plenty of room to excel.



President Obama has moved America a quantum leap forward in regards to renewable energy and clean air, but now those technologies are maturing, their unit cost has fallen dramatically, and the opportunities to lower electricity costs and pay financial dividends is here.



But so much more could be done. There are some places where renewable energy is not yet economic. Fine. But the entire south and all three of America's coasts are full of solar, wind, tidal, and geothermal resources.



If carbon tax revenue funds these projects, it won't impact our oil and gas use at all. However, the demand for coal will taper, eventually to zero.



Coal's saving graces however, are that it is not up to us to tell other countries whether to burn coal, or not. We can export (for cash) every ton of coal that we don't burn here. Also, Coal-to-Liquid fuels are among the cleanest fuels on the planet when processed via the Fischer-Tropsch method.



For simplicity's sake, I would be happy with a flat carbon tax of $30./tonne of CO2 -- as is the standard in many European countries, some Canadian provinces, and other nations around the world.



A simple $30./tonne carbon tax is an easy sell, especially now in a time of low oil prices.



A more complicated carbon tax (although many, many, times better!) may prove too hard to sell.



Which is another way of saying, if we can't even enact a simple $30./tonne carbon tax, how will we ever enact a more complicated carbon tax?



(I admit your proposal is perfect, just a harder sell)



As for allowing carbon tax revenue to be used for anything other than adding renewable energy capacity, energy efficiency improvements or other clean air standards improvements... it is dangerously naive to think that the clean energy industry will see much in the way of funding, as governments will always default to using the carbon tax revenue to solve their deficit problems.



I think your idea is, by far, the best carbon tax solution, I just don't think the political might is there to make it happen.



I hope I'm wrong!



As always, very best regards, JBS