The US has an influential "populist" center that is hard for people outside the US to understand. Hey, it's hard for a lot of people IN the US to understand. But the gist is this: Populism is neither Republican nor Democrat, liberal nor conservative. It swings back and forth. It is based on the belief (or feeling) that "we," the producers and wage-earners, are taxed by the Government to provide handouts to "Big Business" and to the "underclass" of non-workers, whoever they are seen as being at the time (poor whites, immigrants, minorities, etc.)

Cap-and-trade plays into this Populist paranoia. It sets up a situation where, to the Populist, it appears that I, the wage-earner, will be on the hook for higher energy prices to heat my house, drive my car, and mow my lawn. But the game-players on Wall Street get a new business and revenue stream! (On top of their very non-populist bailouts.) And it seems that the "underclass" of non-workers will get a tax credit of some sort, or will simply pay less because they don't have to drive to work.

The Populist viewpoint is that we should be able to incentivize us as individuals so that I, the wage-earner, gets the breaks and keeps the money. Some voices have suggested a carbon tax that was levied per gallon, but was then distributed per capita. It is the perfect Populist answer. Individuals who drive less, actually make money. Those who can't 'discipline' themselves to drive less have a net financial loss. But it's up to the individual, and there are no 'parasites' in the system sucking away money they don't deserve.

Populist resentment is very high right now what with all the bank bailouts and record unemployment payouts. Both a carbon tax or a cap-and-trade regimen could be made populist by making sure that at least some of the revenues are evenly distributed to everyone. A hybrid cap-and-trade-and-tax-and-dividend system sounds complicated, but it gets both Wall Street and Main Street on board. Somehow we've got to find a way to position cap-and-trade as a Populist program, or put some Populist features into it. If we can do that, we would get a lot further a lot faster.