Just One Thing Missing

In an op-ed in the Washington Post George P. Shultz proposes an interesting strategy:

Adopting a carbon dividend approach would pay huge dividends for the global climate, the U.S. economy and U.S. leadership in the world.

Our carbon dividend strategy has four interrelated elements that account for its strength: a gradually rising and revenue-neutral carbon tax; carbon dividend payments made equally to all Americans, to be funded using all the carbon-tax revenue; rollback of costly command-and-control regulations that were implemented because the environmental costs of carbon fuels have not been incorporated into their price; and border adjustment to ensure a level playing field and U.S. competitiveness.

From my point of view it’s just missing one thing: progressivity. The “carbon dividends” paid to those with the lowest incomes should be highest, decreasing until no dividends at all are paid to the highest income earners. If my calculations are correct and carbon emissions increase geometrically with income that’s the only way to produce presumably desired effect.