I don't think even mainstream economists would like that idea -- there's no substitutability from one sector to another in that case.  To take a ridiculous example, say you had partitioned "buggy whips".  The worst part of it, actually, is that you're encouraging exactly what we should be discouraging -- thinking of the economic/environmental system as a set of Descartes-like separate subsectors, with no interaction among the subsectors.  In reality, as we're finding out with the food/oil/commodity crises, not to mention climate change/peak oil, these systems should be thought of as holistic systems -- you know, like an ecosystem.

I thought that was what Roberts was arguing for when he talked about "no net loss of capital in the sector". Otherwise, I don't know what he meant there. But my point was that this would not work, so I was not advocating it, nor was I attributing the idea to mainstream economists.  Actually I'm not attributing any of this "carrots" thing to mainstream economists. Most mainstream economist advocate either a straight carbon tax or a straight cap N trade or some mixture.