As Table 1 shows, pure carbon pricing—without subsidies—is incredibly cheap. The total cost to the U.S. is 23 ¢ per person per day. That's about the cost of a tea bag. Learn EPA's simple formula, and why it's reliable, and if anything a bit high.

The paper shows how to design an agreement so that the key parties, China, India and the U.S. can clearly benefit. (Current U.S. strategy is risky and costly to all parties.) India wins because their costs are so low that a small Green-Fund payment more than covers them.

The reduction in the world price of oil is shown to pay the cost of U.S. and Chinese climate policy. This is calculated from US DOE and International Energy Agency numbers. Reduced OPEC profits will not pay for all future emission reductions, but it will pay for a strong start to climate policy.

The alternative is now wasteful international subsidies (NAMAs). Documentation of the paper is available at the Global Energy Policy Center.

August 5, 2009.  Although I've been watching the international capping stalemate develop for years, I did not consider it a crisis. Yes, it was a dead end, but we learn by our mistakes. And I thought we would. Instead it looks like the years of delay have just caused us to forget our purpose. We are headed backward form a market-based Kyoto approach to old-fashioned ad-hoc subsidies. NAMAs they call them now.

Nationally Appropriate Mitigation Actions are all the rage with developing countries. Translation. They'll pick nice green projects that save some carbon, and the industrialized countries will fund them. No there's not going to be global cap and trade, or any other form of carbon pricing. It's back politically picked subsidies, like in the good old days, but with two more layers of bureaucracy: the international summit meetings and a new Climate Fund.

August 7, 2009.  For good reasons, developing countries reject caps. The obvious alternative—which does not offend as caps do—is a carbon tax. But Environmental Defense (EDF) opposes this, so the U.S. never tried it. With Bush pushing only voluntary actions, the 2007 Bali climate summit invented Nationally Appropriate Mitigation Measures (NAMAs).

Developing countries love their voluntary nature and the assumption they will be paid by industrial countries to do NAMAs. These ideas are front and center in the Declaration we signed at July 2009 Major Economies summit.

The draft language for Copenhagen is focused on NAMAs and mentions a Mitigation

Fund, a Multilateral Fund on Climate Change, an International Climate Fund and many other. All language seems to assume the developing-country NAMAs will be fully funded.

China and India have nixed caps. Without these caps, Kyoto fails. What can be done?

Carbonomics explains "wrecking" the economy, "peak oil," caps, carbon taxes, and Kyoto.