Cap and Trade will not work with carbon. It can work in situations where the cost of removing a pollutant is variable between industries and facilities - but still affordable. The idea is to maximize economic efficiency: if one factory can reduce its SO2 by 50% for $100,000 and by 100% for $200,000, and other costs $500,000 for a similar reduction, then rather than make them all reduce their SO2 by the same amount, you just set an overall limit, then let the companies trade credits. Company B can then offer company A $150,000 to reduce its SO2 from 50% to 100%, and you get the same reduction for a total outlay of $200,000 instead of $600,000. That allows the government to demand even higher SO2 reductions without fear of putting the ‘outliers’ out of business.
This does not work with carbon, because carbon is the primary output of fossil fuel burning. Given a specific technology (coal, natural gas, whatever), there is no way to reduce it short of reducing the amount of energy you produce. Carbon capture and sequestration is no where near ready for prime time, and may never be. So ‘cap and trade’ essentially becomes a mechanism for reducing energy output. And since the demand for energy is growing, the only result can be skyrocketing energy costs. The only efficiencies to be gained would be wholesale conversion from one energy source to another, but in many regions this just isn’t feasible - not in the short term, anyway.
But let’s talk about what a solution might look like. Today, solar electric is simply too expensive. The only way to move to it is to heavily subsidize it, and that’s a bad idea for many reasons. But that may not be the case in the future.
The cost of solar power comes down to several factors: The cost of the cells themselves, the cost of installing them, the cost of the hardware needed to grab, store, and convert the power into something usable, the cost of the energy lost during storage, conversion, adn transmission, and the capital costs of all that hardware.
To gain cost savings, you can make the cells more efficient. We’ve been doing that, but that seems to be slowing down. Another way to do it is to make the cells easier to install. A third way is to reduce the cost of all the support hardware. We’re making progress on all fronts.
The most exciting to me are the various thin-film and flexible solar cell designs. MIT has a demonstration technology that uses a vapor deposition process to ‘print’ solar cell material directly onto surfaces like an ink jet printer. They can actually make a type of paper that generates as much as 50V. The efficiency is currently very low (1%), but that can be improved, something like this would be a real breakthrough. Imagine buying blinds for your window that plug into the wall and actually provide electricity when the sun is shining. feeding that power right into the grid eliminates the need to buy batteries, inverters, and all the rest.
Such a material could make it’s way into roof shingles, car bodies (or car covers), clothing (charging your phone constantly while you’re outside), you name it. Make this cheap enough, and every building and every horizontal surface becomes a potential source of electric power.
In the meantime, electric cars are still getting better, but will remain a niche product until we get better battery technology. Fortunately, there are several avenues of research into better batteries, such as zinc-air. Create a battery with 3 times the charge per weight capacity as lithium-ion, and suddenly electric cars will look pretty damned attractive to just about everyone.
And so it goes. I don’t think there’s going to be one big breakthrough technology that saves us. There’s going to be a host of little ones that slowly penetrate the market and make us more energy efficient, while new power sources slowly make inroads against fossil fuels.
One day the end-to-end price per BTU of non-carbon energy will drop below that of fossil fuel.
And when that happens, the world will begin a massive transition. I honestly don’t think this is that far away - two or three decades, maybe.