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Carbon caps with universal dividends: equitable, ethical and politically effective climate policy

Common to many proposals addressing climate change is a cap on carbon emissions or carbon content of fuels. A cap will generate a market value for carbon. A key issue is who will receive this value. Many agree that there should be a 100 percent auction of carbon permits, but there many opinions about how to disburse the money gained from selling these permits. This paper argues for a universal, equal dividend returned to each person.