Senate can choose Dividends instead of House Climate Change Giveaway

The House strategy for Cap and Trade was 1) hand out allowances to utilities and other powerful lobbies, and 2) hope carbon costs will remain low (the so-called "postage stamp a day"). But many midwesterners, including North Dakotans Sen. Byron Dorgan and Rep. Earl Pomeroy are sceptical of the "postage stamp" strategy. High-coal states will face major costs, and the strategy puts supporters at risk in the 2010 or 2012 elections.

But the Senate still has time to choose an alternative strategy that sets aside Waxman and Pelosi's vision of realpolitik (that had almost everyone holding their noses by the end of House debate). An alternative strategy would be to level with the American people, tell them that costs might be high, but auction revenues will provide them with a dividend to help cover the costs. Perhaps Van Hollen's Cap and Dividend bill could be modified to limit the tradability of the auctioned permits, and then return the revenues to the people, bypassing the lobbyists and financial speculators.