He told scientists that having "an internationally harmonized system of carbon taxes" would be much more efficient, from an economic standpoint, than emissions caps. According to Nordhaus, small countries would not have to worry about achieving certain emissions levels, the system would be much less prone to corruption or cheating, and taxes, "while hated," are a long-standing and "proven" financial instrument.

"They're not something that you need to invent overnight to solve an important problem. … It is unlikely that the Kyoto model, even if it is strengthened [here in Copenhagen in December] as it is currently envisioned, can achieve its climate objectives in an efficient and effective manner. To get the world's climate system and global environment on this untested approach, with such clear structural flaws, is in fact a reckless gamble," Nordhaus says. At the very least, he says, the Kyoto treaty should be modified to allow countries to fulfill their obligations through joining an international carbon tax process.

Nordhaus's strategy has a lot of opponents, many of them strong environmentalists—here is a good argument against the idea. Still, in Washington last week, Representative John Larson (D–CT) introduced a bill in the House of Representatives to set up a carbon tax system. With leadership on Capitol Hill and in the White House committed to a cap-and-trade system, the bill is likely doomed, but that hasn't stopped Larson from advocating the tax approach in The New York Times.

"The American people want us to level with them," Mr. Larson, a moderate Democrat from Connecticut and a member of the House leadership, said in an interview. "We create price certainty without any new bureaucracies or complicated auction schemes."