Global Warming, CO2, Carbon Emissions, and Managing Green and Renewable Energies
From the 2008 experience alone, we know that rising the price of oil could shift markets to renewable energy and would promote conservation, which would reduce CO2 and other carbon emissions.
Under Henderson's structural strategy, a tax would be added to the wholesale price of oil to maintain its cost around a certain level, for example $125/barrel. This price could be set lower initially and later on adjusted to a level high enough to achieve the carbon emission targets prescribed under international agreements.
No new trading system would be needed and no detailed assessment or reporting would be required from most businesses. The strategy is fully scalable and could be implemented gradually to give the economy and everyone time to adjust.
Of course, the price of gasoline would go up, but people would have more money to spend from a drop in income and other taxes (see Revenue-Neutral Taxation).
The strategy could be applied to other fossil energies and work in the same way. It would enable green and renewable energies to sort themselves out according to their carbon intensiveness. For example, ethanol produced from corn would become expensive and fall out of favor as its production requires large amounts of fossil fuels which would be taxed.