i was going to post this in the cap and trade thread, but that has devolved into a debate about global warming/climate change. for the purposes of this thread, i don't care if climate change is real or a conspiracy. a cap and trade bill has passed.

the argument is made that cap and trade systems allow for the cheapest, most efficient reductions in carbon production. otoh, they also create a huge new financial market for fire-men to play in. so it remains an open question what part of the efficiency savings are going to end up at goldman sachs, et al. [question: more than 100%?]

the alternative, which i was disappointed was NOT discussed in the cap and trade thread, is to just tax carbon. a straight tax on energy at its source according to its carbon content. nuclear or solar power would not be taxed directly, but of course all carbon inputs - the diesel running the construction trucks and so on - would have been taxed at production and those costs passed on. if the government is concerned about regressive effects various rebates can be constructed.

question: why not just a straight tax instead of cap and trade? any evidence or data?