Step One - implement a levy in Aus $ on all carbon-based fuel sales and gradually ramp it up over a transition period.

Step Two - invest part of the resulting 'Carbon Pool' Aus $ fund in renewable energy projects (mega watts) and energy saving initiatives (nega watts) by direct investment in Units redeemable in payment for energy of all types.

This would be achieved by working with development/operating partners who receive an agreed proportional share of production or savings, or the associated revenues.

Step Three - distribute an 'energy dividend' of Units equitably to individuals and businesses.

Using this approach the recipients of Units have the choice of redeeming Units against profligate use of carbon fuels; exchanging Units for something else of value to them eg in the local shops; or of direct investment in Mega Watts of renewable energy production, or repayment of 'energy loans'  denominated in (say) kilo watt hours or equivalent, received to make (nega watt) energy saving investment.

The outcome is that Australian renewable and energy saving projects are essentially receiving value now in return for issuing Units which will cost nothing to redeem in the future. Moreover, to the extent that such Units begin to circulate as currency (which they will) there is an interest-free loan - aka seigniorage - available to finance renewable energy production and energy savings.

This approach - of monetising the intrinsic value of the energy in carbon, rather than attempting to monetise by 'fiat' CO2 which is intrinsically worthless - will IMHO achieve these targets.

This presentation to the Scottish Energy Institute set out the approach. I outlined it to a committee of the Scottish parliament, and it has received a great deal of interest up to and including ministers - watch this space.

"The future is already here -- it's just not very evenly distributed" William Gibson