Determining options for the revenue generated by the two principal pricing mechanisms is where the rubber meets the road. The options range from revenue used for government programs, such as we see in California, to “revenue neutral” such as we see in British Columbia where revenues are returned to the households and businesses through cuts in other taxes.
Other ways to distribute revenue include: reduce the deficit, invest in specific programs like infrastructure, reduce payroll or labor income taxes, reduce capital taxes, corporate income taxes or capital gains tax, or give revenue to states or other sub-federal level entities.
One critical investment that must be made is in research – research on alternative fuels, distributed capture (forestry, agriculture and geologic processes), energy efficiency, alternative energy sources, and land use planning, batteries, and so on. But also it is imperative that we invest in basic research on how the climate system works, glaciology, oceanography, biochemistry, and much more. Releasing the human brain and the human spirit will bring amazing results.