By E. Thomas McClanahan, Kansas City Star Editorial Page columnist

What happens if the price of carbon credits drops like a rock? Then the incentive to cut back on pollution falls as well. Under cap and trade, credits to burn carbon are issued and traded on an exchange. Companies that emit carbon would have to buy them, while companies that saved carbon would pay less and have credits to sell.
Europe has already gone to this system, and one problem is the large fluctuations in the price of carbon credits. Recently, they've fallen like a rock so they're not doing much to boost green energy. The problem of rapid fluctuations is an issue in itself, as Ben Stein wrote Sunday in The New York Times. A better solution would be a direct tax on carbon. It wouldn't create the uncertainty that the cap-and-trade system would impose.
What to do with the revenue? Use it to lower payroll taxes, and stimulate hiring.