by David Sassoon -
Apr 3rd, 2009 
Rep. Chris Van Hollen of Maryland introduced a climate bill this week that received little notice, but the formula it provides for capping carbon offers a useful strategy for winning broad public support: Make polluters pay fees for carbon emissions and rebate the revenue to American families.
It is called the The Cap and Dividend Act of 2009, and it is an astonishingly simple piece of legislation – a mere 20 pages long.
The reason this little bill might end up punching above its weight is because it speaks loudly where the 648-page climate bill introduced the day before by Reps. Henry Waxman (D-Calif.) and Ed Markey (D-Mass.) remains silent: on the question of carbon credit auctions and allocations.
Van Hollen wants to auction 100% of the permits that companies will need in order to release carbon into the atmosphere – in other words, no free giveaways to polluters, despite their demands.
He also wants to return 100% of the auction revenues equally to every American resident with a social security number. That's the "dividend" in the bill's title – also sometimes referred to as "cash back" or "rebate."
His bill echoes President Obama's thoughts on cap and trade as well. The president wants a program that controls emissions, auctions 100% of the permits and returns most of the revenues to working families. Peter Orszag, the president's budget director, explained succinctly why a 100% auction is necessary:
To give away the permits instead would be "the largest corporate welfare program that has ever been enacted in the history of the United States."
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