I think this comment from the CEO of Novomer, a company spun off from research at Cornel Uni in the US that produces polymers from CO2, says it best:

""You can't have a cheaper feedstock than carbon dioxide. You actually get paid to use it," Hamilton said."

Here's a selection of links to sites that discuss this further. I don't think any are Communist, but I won't make any promises.

http://www.fischer-tropsch.org/DOE/DOE_reports/68111/68111_toc.htm
http://news.cnet.com/8301-11128_3-9811962-54.html
http://www.nap.edu/openbook.php?record_id=10153&page=83
http://www.novomer.com/?action=CO2
http://oasys2.confex.com/acs/238nm/techprogram/P1260309.HTM

There are many, many more.

Is this tax on carbon really a tax on carbon. Or just a wolf in sheep’s clothing.
It maybe that the architecture of the legislation is simply set up to provide mechanisms to assist monetary policy through carbon taxing. This could be achieved easily by sectoring the economy within the legislation. Read the “Henry” report.
If, for example, the mining industry start to over heat the economy the mining sector carbon tax, could be increased and revenues from this could be distributed to other sectors of the economy “easing the burden”. No doubt some of the cream will remain with the Government.
IF, this is the case I can’t see a problem. The country needs to be able to control monetary policy with something other than nuking the economy with interest rates. Much more finesse is required in this day and age or we may feel the pain. Which too many Australians means losing the family home. This scenario is ludicrous when really there is no good reason for any family to be without a home in some form.

I readily concede - as "Antiseptic" makes clear - that the public at large is entitled to me more skeptical about an ETS in the aftermath of the global financial crisis, which the misuse and abuse of derivatives played a major role in inducing. And press reports (such as that on the front page of the Fin Review a month or so ago) that banks are salivating at the prospect of an entirely new set of derivative products to play with can only underscore that skepticism.

Since I haven't worked for a bank for (almost exactly) two years, I have no vested interest in promoting an ETS as a way for banks (and others) to generate profits. Rather, I do so from the starting point that if the level of emissions is the problem, then the 'least cost' way of reducing them is for the government to set progressively lower limits on emissions, allow markets to 'discover' the price of emissions consistent with those limits, so that some combination of profit-motivated capitalists and planet- (or humanity-)loving scientists can 'discover' the low-emissions technologies which will enable energy (and other things societies want) to be produced in ways that comply with the lower emissions limits.

As "Tombee" pointed out in an earlier post in this thread, like most economists I don't know much about technologies. The ideas "Antiseptic" points to may work: I hope someone is looking into them.

I would like to think (though I can't be sure) that the tighter regulation of derivatives proposed since the GFC will prevent some of the abuses and misuses which contributed to the GFC from being repeated under any ETS.

And I'm surprised that "Arjay" hasn't said (yet) that the solution to climate change is a government-owned bank.

Thanks for the considered response. I hope you don't feel the need to put in the previous employer disclaimer too much, I think enough time has passed for that wound to heal...

I can assure you that these technologies are being investigated, but I'm very puzzled by the lack of interest or even publicity for these efforts. It seems to me that we're putting a great deal of effort into creating complexity out of something that should be pretty simple and that bothers me.

Well since you are on the topic of banks Saul,perhaps you could answer a few simple questions.
1/ Why must new money be created?
Is it because of our increases in productivity or are the Central banks who create all this new money the source of all productivity?If Central Banks are the souce of new productivity,then we do not need other industries or even people?
2/ If central banks do create our increases on GDP as debt,does this not mean we are being punished for being productive? Under our system,the more productive we are the more debt we incur.
3/ Why cannot the RBA be the bank of first resort when lending.With GDP + inflation= 6%, on a $1.4 trillion economy the private banks create $86 billion per yr as debt.Why cannot our productivity increases get expressed as a tax credit via our own RBA?Of that $86 billion created from nothing (much borrowed OS) the RBA only gives a dividend of half a $ billion the Govt.This $86 billion represents our productivity.This is why we are forced to flog off resources for nothing so we can have sufficient money for our economy to function.

Would you allow you neighbour to steal from you Saul and then say I'll do you a favour.I'll loan your money back to you but you must repay it with interest.This is what the West has been doing for nearly 100 yrs ie allowing private central banks to create our productivity as debt.

Well since you are on the topic of banks Saul,perhaps you could answer a few simple questions.
1/ Why must new money be created?
Is it because of our increaces in productivity or are the Central banks who create all this new money the source of all productivity?If Central Banks are the souce of new productivity,then we do not need other industries or even people?
2/ If central banks do create our increases on GDP as debt,does this not mean we are being punished for being productive?Under our system,the more productive we are the more debt we incur.
3/ Why cannot the RBA be the bank of first resort when lending.With GDP + inflation= 6%, on a $1.4 trillion economy the private banks create $86 billion per yr as debt.Why cannot our productivity increases get expressed as a tax credit via our own RBA?Of that $86 billion created from nothing (much borrowed OS) the RBA only gives a dividend of half a $ billion the Govt.This $86 billion represents our productivity.This is why we are forced to flog off resources for nothing so we can have sufficient money for our economy to function.

Would you allow you neighbour to steal from you Saul and then say I'll do you a favour.I'll loan your money back to you but you must repay it with interet.This is what the West has been doing for nearly 100 yrs ie allowing private central banks to create our productivity as debt.