Slowly, the idea of carbon credits is making its way into the minds of legislators. Market based solutions to pollution control are much better than regulation. However, there appears to be a risk than the initial allocation of carbon credits would simply be given to current polluters. This must be resisted.
Indeed, this has several adverse consequences: 1) it rewards polluters, 2) it gives incentives to pollute more ahead of the implementation, in order to obtain more credits, 3) the revenue from credit sales would be lost. The Southern Alliance for Clean Energy is currently inviting economists to sign a statement along those lines. I signed it.
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