In a world where we have plenty of time to make the transition from greenhouse polluting energy to renewable energy, cap-trade schemes (e.g. cap-grandfather-trade, cap-auction, cap-auction-rebate, etc.) might be the best way to go. However, the current situation is so dire that it is unclear that such system can respond in time. Such systems work best at influencing new investment decisions. Unfortunately, the world has existing infrastructure that is currently adding 2.2 ppm of CO2 to the atmosphere each year, and the amount is growing every year (though the financial crisis should set back emissions for a couple of years). At this rate we will reach 450 ppm in less than 30 years. Thus our past investment decisions need to be undone; modifying future investment decisions will take too long. In the next 20 years we must close most fossil plants. Any scheme that does not shut down greenhouse polluting plants in short order will be a failure. By this criteria, it is unclear that any of the cap-trade systems will actually accomplish their goal. Most likely it will be necessary for the government to "bail-out" the owners of fossil plants, e.g. by buying them to shut the down. I don't like this one bit, but events of recent weeks suggest that this is the way it will play out in "Democracies" such as ours.