So, if we stop emitting at around the trillionth ton of C, I am told by no less than Jim Hansen, the ocean will absorb enough CO2 to get us back down to 350 ppmv before the system equilibrates to the peak forcing. That is, we probably won't need to scrub CO2 out of the free atmosphere, which, jobs or no, would definitely be a negative kick to well-being. Whereas if we keep going beyond that, we probably will; that's a terrible legacy to leave.
So, instead of arguing about which nation gets to emit what, and gets to trade what, I propose that we simply divide the atmospheric carbon dump evenly among those now living. So you have 65 tons of CO2 left to you, and I have 65 tons left to me, and so do Michael Dell and Sandra Bullock, to pick a couple of rich local people at random. Now Michael Dell will get through those 65 tons in a jiffy, no doubt. But being rich, he can bid for more on the open market. Some person in Baluchistan with no intent to use his 65 tons can happily sell some of them to Michael Dell. (These are NOT units of fuel. These are the rights to units of CO2 emissions.)
Conceivably, we can adjust the cap if the denial squad is right: if the sensitivity is low we can allocate more emissions. But the principle that eventually come of the carbon has to be left in the ground still stands. We cannot release all of it. So the sooner we agree to the principle of a hard cap, I think, the better.
A very low-friction electronic marketplace will be easy to set up.
Consider some of the advantages of cap and trade at the individual level. Externalities are clearly priced. People not using their allocation are directly rewarded. International negotiations are avoided. No blame accrues to past behavior; no nation gains a competitive disadvantage. The windfall goes not to the fuel producers, but to the poorest people in the world; a natural income transfer. So much for the crocodile tears for the underdeveloped. We use the emissions cap explicitly to support them in a transition to a market economy.
Most of all, it's simple and it's fair. You can explain it to people. There are advantages all around. Did I miss something?