RGGI, which MA is a member of was structured to include free allowances to emitters - exactly the opposite of what Bowles is arguing for.  

To be fair to him though, Bowles wasn't in MA state government when the RGGI structure was developed.  And to be even fairer, the previous MA Governor (Romney) pulled out of RGGI at the 11th hour, so Bowles & his boss deserve from credit for getting the state back into RGGI.  But one hopes that his wisdom on allocation vs. auction will be used to try and shift the RGGI rules.

What if, in addition to the cap and trade system proposed today, governments offered dividend "rewards" to shareholders of targeted companies for reducing their carbon footprints? In other words, Carbon Offset Dividends. What makes this idea worth exploring?

It provides financial incentive to the owners of companies (their shareholders) to reduce their carbon footprint.
It will lift some fiscal pressure from shareholders on company leadership for short-term returns. This, in turn, can help them to make the longer-term decisions necessary for structural change.
Both wealthy and middle class people can benefit. Basically anyone who invests. And that's something both political parties can get behind!
It will increase investment (even from green investors) in companies that actively work toward reducing their carbon footprint. And provide incentive to companies who currently don't have plans do do so.
It opens the door and gives a voice to agents of change inside the power structure of energy, automotive and oil companies (if they invest in them).
If done right, it won't cost a thing. Dividends can be paid for with the money generated from the cap and trade system.
It provides the carrot that's missing with the stick of the cap and trade system.

Founder, Buzz Factory, Inc.