Mark June 12, 2007, on your calendar, for on this day, a Canadian economist named Ross McKitrick proposed a carbon tax plan marvelously designed to make people on both sides of the anthropogenic global warming debate happy.

Of course, it is quite unlikely that any American media will cover this compromise solution, for it calls the bluff of the climate change alarmists. Fortunately, we at NewsBusters are not so constrained to share facts with our readers.

With that in mind, as reported by Canada’s National Post (h/t Alar Aksberg, emphasis added throughout):

Temperatures in the tropical troposphere are measured every day using weather satellites. The data are analyzed by several teams, including one at the University of Alabama-Huntsville (UAH) and one at Remote Sensing Systems (RSS) in California. According to the UAH team, the mean tropical tropospheric temperature anomaly (its departure from the 1979-98 average) over the past three years is 0.18C. The corresponding ing [sic] RSS estimate is 0.29C.

Now put those two ideas together. Suppose each country implements something called the T3 tax, whose U.S. dollar rate is set equal to 20 times the three-year moving average of the RSS and UAH estimates of the mean tropical tropospheric temperature anomaly, assessed per tonne of carbon dioxide, updated annually. Based on current data, the tax would be US$4.70 per ton, which is about the median mainstream carbon-dioxide-damage estimate from a major survey published in 2005 by economist Richard Tol. The tax would be implemented on all domestic carbon-dioxide emissions, all the revenues would be recycled into domestic income tax cuts to maintain fiscal neutrality, and there would be no cap on total emissions.

Stay with this, folks, because it’s brilliant:

The IPCC predicts a warming rate in the tropical troposphere of about double that at the surface, implying about 0.2C to 1.2C per decade in the tropical troposphere under greenhouse-forcing scenarios. That implies the tax will climb by $4 to $24 per tonne per decade, a much more aggressive schedule of emission fee increases than most current proposals. At the upper end of warming forecasts, the tax could reach $200 per tonne of CO2 by 2100, forcing major carbon-emission reductions and a global shift to non-carbon energy sources.

Global-warming activists would like this. But so would skeptics, because they believe the models are exaggerating the warming forecasts. After all, the averaged UAH/ RSS tropical troposphere series went up only about 0.08C over the past decade, and has been going down since 2002. Some solar scientists even expect pronounced cooling to begin in a decade. If they are right, the T3 tax will fall below zero within two decades, turning into a subsidy for carbon emissions.

Everybody following this? To make it simple, if CO2 emissions exceed an agreed upon level, companies will be taxed at an escalating rate. On the other hand, if CO2 emissions fall below said level, the companies receive a tax credit.

Sounds like a win-win for everyone, right?

At this point the global-warming alarmists would leap up to slam the proposal. But not so fast, Mr. Gore: The tax would only become a carbon subsidy if all the climate models are wrong, if greenhouse gases are not warming the atmosphere, and if the sun actually controls the climate. Alarmists sneeringly denounce such claims as "denialism," so they can hardly reject the policy on the belief that they are true.

Under the T3 tax, the regulator gets to call everyone's bluff at once, without gambling in advance on who is right. If the tax goes up, it ought to have. If it doesn't go up, it shouldn't have. Either way we get a sensible outcome.

How delicious. But, it gets better:

But the benefits don't stop there. The T3 tax will induce forward-looking behaviour. Alarmists worry that conventional policy operates with too long a lag to prevent damaging climate change. Under the T3 tax, investors planning major industrial projects will need to forecast the tax rate many years ahead, thereby taking into account the most likely path of global warming a decade or more in advance.

And best of all, the T3 tax will encourage private-sector climate forecasting. Firms will need good estimates of future tax rates, which will force them to look deeply, and objectively, into the question of whether existing climate forecasts have an alarmist bias. The financial incentives will lead to independent reassessments of global climate modelling, without regard to what politicians, the IPCC or climatology professors want to hear.

Impeccably reasonable, wouldn’t you agree? McKitrick concluded:

In my view, the ideal global-warming policy is a carbon tax, and the optimal rate is zero. I like the T3 tax in part because I think it would result in this outcome over time. Yet those whose fears of rapid warming lead them to demand stronger policy measures, including an emissions cap, should, in principle, be able to support the same mechanism. Especially in light of the long stalemates over carbon-dioxide emissions policy, I doubt any other policy could command equal support from such polarized camps.

In theory, I agree. However, since global warming alarmism appears to be much more about money and wealth redistribution, I don’t believe for a second that folks like soon-to-be-Dr. Al Gore and his witting accomplice James Hansen would support such a plan.

Do you?

—Noel Sheppard is the Associate Editor of NewsBusters.