Amongst all the discussion swirling about what sort of policy instrument presidential candidates will favor to curb climate change, the consensus seems to be that in the two-way contest between cap-and-trade and a carbon tax, the tax would actually be the most effective instrument while cap-and-trade is the most politically feasible.

What candidate is going to shoot themselves in the foot by charging into the presidential race trumpeting a new tax, even if it is the most effective policy tool on climate change? Meanwhile, cap-and-trade systems have all kinds of problems, as Europe has demonstrated. Former Secretary of Labor and current University of California at Berkeley professor Robert Reich is pushing a third option: a carbon auction. This sounds like cap-and-trade at first, but it involves an element that is oh-so much more politically attractive -- dividend checks.

Companies would have to bid for the right to pollute. And, most ingeniously, the money raised in the auction would be shared equally by all citizens in the form of yearly dividend checks – just like the residents of Alaska now get yearly dividends for their share of the state’s oil revenues.

I'm surprised we haven't heard more about this option. With the exception of Reich, I can't find any commentary on it. Look for it in the months to come.