To the editor:

The agreement that President Obama made with China is more about results to be achieved than how to achieve them.  EPA regulations have been the main tool used so far, but that is like using a hammer to drive a screw.

There are three broad categories of tools that can be used: regulations, cap and trade and a carbon tax. The first two don’t adjust to demand, and demand changes depending on how well the economy is doing and how cold a winter it has been. When demand is low, fixed limits provide little incentive, and when demand is high, they produce price spikes. A carbon tax scales with demand, without creating unpredictable energy prices. All three, by themselves, have problems with increasing the government’s role in the economy and regressive cost increases. However, a tax can be rebated back to the people; regulations and cap and trade can not. A monthly rebate check of the proceeds eliminates both the regressive nature of the tax and an increase of government revenue.

Further, border adjustments can be added to a carbon tax to level the playing field. Countries with a comparable system trade goods evenly; goods from countries without one receive a tariff. The U.S. and China combined represent over half of the world’s economy. If countries like India want to play in the world market, and China and the U.S. have border adjustments, India would have good reason to implement a CO2 reduction plan of their own.