Once upon a time the people of a great land were troubled and deeply divided by two difficult problems. Government throughout the land was nearly deadlocked. The Red team was certain the biggest problem was the growing national deficit. It was presently more than $17 trillion and growing quickly. The Blue team was unconcerned with the national debt and instead was focused on global warming, caused primarily by carbon dioxide emissions. Currently more than 5 billion tonnes of carbon dioxide is emitted into the atmosphere each year by fuels burned in the land. These issues caused a growing rift between the Red and Blue teams as each denied not only the importance, but the very existence of the problem the other team was focused on. The land was sharply divided and people were pessimistic.
Then a wise man suggested a solution. If we agree to sell the right to emit carbon dioxide and use the money to pay down the national debt, perhaps we can solve both problems at the same time.
Protests erupted far and wide. Why do we in this land have to pay for emissions that are dispersed globally and are free in other lands? How will we measure emissions and ensure each emitter is paying their fair share? How can we create such enormous value from almost nothing? Why do I have to pay to solve a problem that I do not even acknowledge exists?
Rare acts of remarkable statesmanship allowed the plan to move forward even as news programs continued to intensify the conflict and controversy. Issues large and small were hotly debated. The plan that was finally agreed to set the price of carbon dioxide emissions at zero for the first three years. This cost increased gradually each year and was set at levels designed to repay the national debt completely over a period of fifty years. Promising results eventually flabbergasted the naysayers. It was working. The deficits and emissions were both decreasing. Other lands followed the example and eventually a carbon dioxide based currency emerged world wide.
They lived happily ever after.