To my preceding post on "CO2 Charge Is Not a Tax", Mr. Peter Spinney brought out some excellent points. I especially appreciate the point about political realities regarding taxes. Today's tax policies or sin taxes are not as effective as they can be to change people's behavior. The missing ingredient is ownership and selfish interest. When a consumer pays a gasoline tax, it is viewed as a cost adder, period. If the government uses it to improve roadways, wonderful. If not, the consumer has little or no recourse except through the weak process of democratic election.

The same perception will apply to a carbon tax. Consumers of electricity will see the electric bill rise, and may entertain the thought that the government will use that money to do something about the environment. But there is little sense of ownership or control over the use of that fund, even if, as Peter Spinney said, it is earmarked as a Public Benefits Fund.

What is needed is an accounting system to track and report the "investment" by the individual electricity consumers into this Public Benefits Fund. This is an idea of Tier 2 Assets in the concept of UDI-ism. Air is a public asset owned jointly by all inhabitants of the earth. Payments by individuals into the carbon public benefit fund are individual investments into the common asset of Air. Control over the use of this fund should reside locally in the geographical region where the same carbon charge policy is applied. Government officials may not use this fund without polling the owners of this fund. In this mechanism, use of the money stays with the payers of the carbon charge.

Imagine what this can do in a global context where some nations implement a carbon charge and other nations do not. A nation that implements it can keep track of the total investment that the nation's residents have put into the Air asset. The carbon charge will have its effects on that nation's CO2 emissions. That contributes to the reduction of the global CO2 emissions. Nations that come late to the global carbon table will face the facts that they are behind the other nations in the investment in the global air asset. Therefore, data will be available to make a rational cost and benefit allocation among the nations for their contributions to the common problem.

This global accounting system can remove the objection of one country doing more than other in solving the global problem. The fact that the carbon charge stays within a country for its levy and disposition means that local autonomy is kept. Each nation can move forward at its pace. The CO2 price may be regulated or determined by each nation according to its economic, regulatory or market system.

Each country's setting of its CO2 price becomes a regulatory control variable which can be used to affect the pace of CO2 reduction.