It’s a far reach to believe that a viable climate policy, with all the associated indirect taxes, could be implemented in today’s economic environment.

The public can’t face any more financial strain and the government doesn’t have much dependability concerning money collection and allocation.

Could that be why the climate bill always fails? Is it only the financial aspect of the policy that drags down the bill?

Well, sort of. While the financial aspect is significant in terms of public support for such a bill, the actual process and practice of the policy may be the biggest reason for its failure.

The nearly biannual climate bill never evolves; it’s always based on cap-and-trade, as if the concept is the only viable solution for our climate policy.

Does cap-and-trade ever get old?

As diagnosed in my previous columns, the cap-and-trade system fails to satisfy any emission issue, instead giving leeway to historically significant companies – the most influential ones – allowing offset programs to indirectly raise the cap and, not surprisingly, place the financial burden on the public.

Then why does cap-and-trade continue to be the focal point of climate policy?

It could be the ease of transition for the largest polluters, or that the system allows for the more influential and opportunistic companies and officials to integrate irrelevant programs and incentives.

But I believe the answer is much simpler: Carbon remains cheap and profitable within a cap-and-trade program. Policy should not strive to cap emissions. Instead, policy needs to price carbon, to tax carbon to the point where it is no longer considered the cheapest source.

The only way for carbon fuel sources to be pushed from the market is to make alternative fuels cheaper. This is the basis of the carbon tax.

As defined by the Carbon Tax Center, a carbon tax is a tax on the carbon content of fuels, specifically coal, oil and gas. The carbon content is defined as the carbon dioxide emitted when burning those fuels.

But the tax will only be successful if collected from the source, before the fuel enters the market – essentially an upstream tax. This is vital for the evolution of the carbon tax into the fee-and-dividend program that will be explained later.

Even the simplest form of this carbon tax provides immediate benefits and advantages over the cap-and-trade system.

First and foremost, carbon is priced. No longer is the issue about capping emissions from the source; instead the source of the emissions becomes more expensive. Once again, the key is to make carbon fuel more expensive than its alternatives.

This also provides stability and predictability to the carbon market, allowing future investments to be made in confidence.

Knowing that the price of carbon will remain stable, companies could begin to fund initiatives and invest in cleaner, more efficient energies without gambling on the market fluctuations within the current carbon market.

Second, since the tax is collected before the fuel enters the market, this tax will affect all sectors: electricity, transportation and industry. Cap-and-trade has been solely focused on the electricity sector, which doesn’t represent even half of the total U.S. emissions. In a report on “Carbon Control in the U.S. Electricity Sector,” the Congressional Research Service states that the electricity sector accounts for roughly 40 percent of U.S. carbon dioxide emissions. Policy can’t simply ignore the majority of the issue.

Third, the carbon tax can be implemented quickly in comparison to a cap-and-trade system. As previously noted, the cap-and-trade system is full of loopholes and exceptions: the proper emission cap, the process of determining the fair allocation of carbon credits, the offset programs, penalties associated with excess emissions, regional conflicts, and the “grandfathering” in of the older, mostly carbon-dependent plants and companies. The cap-and-trade policy continues to fail while emissions continue to rise. On the other hand, the tax can be put through swiftly, which is significant due to the urgency of the situation.

Finally, the carbon tax is relatively simple to comprehend and is transparent concerning bureaucratic matters. The tax can’t be manipulated to benefit the polluters, unlike cap-and-trade.

For example, as presented by the CTC, if we were to follow through with cap-and-trade, companies could prepare for the shift. Polluters could maximize or exceed production standards to earn more carbon credits once the system comes into practice.

Once the unwarranted credits are obtained, the companies can return to normal production patterns. Able to trade away the excess credits for profit or hold them for an unexpected spike in demand, the company now has leverage and power that denies any environmental benefit.

Overall, the cap-and-trade system allows for too much wiggle room, while the tax eliminates the ability for special interests to interfere.

But there are serious question marks about the carbon tax; opposition can easily destroy the concept with a reference to the state of the economy. The most obvious complaint is regarding the tax issue.

For the lower class: Couldn’t the carbon tax hurt the already suffering lower class, or the entire society for that matter?

For the tea partiers: Why would I want the government to levy another new tax? More money to spend recklessly?

For conservatives: More taxes are the last thing our country needs, there must be another climate policy without the financial strain.

Enter fee-and-dividend.

As previously noted, the carbon tax on a fuel source will be collected at the market entry point; the consumer is not directly paying any tax. However, the price of goods manufactured with said fuel sources will rise, thereby essentially shifting the tax to the consumer.

While this is where the former questions rise, this is also where the dividend modification answers such concerns.

This evolution of the carbon tax into the fee-and-dividend approach is best explained by the most outspoken proponent of such a system, former NASA climate scientist James Hansen.

Instead of the government pocketing the tax for undesired policies or programs, the tax will be distributed to the public – allocation determined by age, family, wealth, and lifestyle.

The economical citizen will take advantage of the dividend and begin to adjust to a more efficient lifestyle, possibly buying a new vehicle, toning down their electricity/utility usage, or choosing the safe, advanced products over the outdated and carbon-intensive ones.

The fee forces both the simplest and the most influential companies to either reduce fossil fuel usage – and in turn, production – or to begin investing and utilizing the so far ignored alternative energy technology.

The dividend urges the public to shift their lifestyle and change their habits, and by doing so be rewarded with surplus on a monthly basis that can be used for other finances previously occupied by, for example, gas money or other luxury expenses.

The key, though, is a 100 percent dividend. This program must be revenue neutral; government pocketing would ruin the safety of the policy.

The lower class, tea partiers and conservatives should not shudder at the “tax” label; in theory, the only tax is on the polluter. The only way to lose within the dividend system is to refuse to change.

Policy is meant to benefit the public, not punish; it is implemented for the greater good.

In reference to Part 1, we need to talk green to be able to walk green within this country. I just hope we act for the greater green.