EPA Regulation of CO2 Emissions

On Monday, the Supreme Court ordered the EPA to revise its policy regarding CO2 emissions (NYT article). It sounds like this will lead toe the EPA regulating CO2 emissions. I can only hope that we get something similar to Pigouvian style emissions taxation as Greg Mankiw has been talking about for some time (two recent posts here and here), and that I will claim to have independently thought up. The important steps would be: 1) find some way to estimate marginal social (distributed) costs caused by CO2 emissions (yikes! that sounds hard) 2) establish some sort of method to estimate emissions by the different polluters (less hard) 3) tax those emissions based on the marginal social costs. This might take the form of taxing emissions directly, or, more likely, taxing fuel based on the CO2 emissions it will release when combusted. 4) enjoy an efficient (though local) level of CO2 emissions :)

Pigouvian taxes have many advantages over other government solutions to pollution like technology subsidies or alternative fuel subsidies. One, the government has to know many fewer technical details about the future of innovations in pollution reduction and fuel efficiency. Also, the system is much less prone to pork, corporate welfare and favoritism. The system also makes it much easier to tell exactly when the government has done enough to reduce emissions. There are many other reasons, but I won't go into them here.

I am rather cynical about the prospects Pigouvian taxes actually being implemented, but I would love to be proven wrong.

As a side note, the NYT website is ultra annoying because if you double click anywhere, it brings up a definition for the word you clicked on, and I have a habit of fidgeting with my mouse and double clicking everywhere.

UPDATE:
Bush has responded to the Supreme Court ruling (LA Times reports):

But solving the problem, he said, must not cut into economic growth.
"It's going to require new technologies, which tend to be expensive, and it's easier to afford expensive technologies if you're prosperous," he said.

That sounds like subsidies to me.