Last month, Senate Majority Leader Harry Reid pulled the plug on comprehensive climate change legislation, effectively killing any chance that a bill to limit carbon dioxide emissions will pass this year.

Because Republicans are expected to make significant gains in the November midterms, it is unlikely that any climate change legislation will be able to get through Congress until after the next presidential election in 2012. Even that scenario would require that President Obama be re-elected, which at the moment appears far from inevitable.

The administration’s failure to get an energy bill through Congress is attributable to the fact that the energy bill it supports is not a good bill, and the environment it has bred in Washington is hostile to compromise.

Democrats insist that imminent action on climate change is necessary to save the planet, yet they spent their first year in office exhausting all of their political capital on a health care reform bill. There are thus many reasons to question their motivations, and their sincerity.

If the president is truly convinced that climate change poses a looming threat to civilization, why did he not make it a top priority after he took office? If the president is truly committed to addressing climate change, why didn’t he work across the aisle to reach an achievable and sustainable compromise earlier, when tremendous goodwill existed in both parties?

There is a pretty reasonable middle ground on this issue.

The president and most Democrats support a cap-and-trade program that would cap the amount of carbon dioxide that can be emitted by distributing carbon permits to businesses, and then allow businesses to sell the carbon permits they don’t use to heavy polluters.

The less you pollute, the more permits you can sell, and the more money you can make. The more you pollute, the more permits you have to buy, and the more money you lose. Gradually and over time, the system would create economic incentives to bring national pollution levels in line with goals legislated by Congress.

The Republicans object, saying that requiring big polluters like coal power plants to pay more to burn coal will result in higher energy cost for American families, many of which have no choice in where they get their power. They have dubbed the scheme “cap-and-tax.”

They are right. Cap-and-trade is an energy tax. To avoid admitting that fact, Democrats have drawn up an elaborate plan they can claim is market-based, but that in reality would lead to higher energy costs for families and businesses. Huge new bureaucracies would be required to implement the program, and an enormous regulatory burden would be placed on already over-regulated businesses.

Which begs the question; why not just admit that the program is a tax? Instead of allowing Wall Street bankers to get rich off of a complicated new trading scheme, why not just use traditional levers of government taxation to incentivize people to use energy more efficiently?

For instance, the government already levies a gas tax of 18 cents per gallon. Increasing that astronomically to, for example, $1.50 a gallon would persuade more drivers to buy cars with better gas mileage, as they did two years ago when gas passed $4.00 a gallon. The psychology of that moment forced upgrades in the automobile fleet that will be felt for a long time, because drivers who traded Tahoes and F-150s for Accords and Jetas are still driving those cars.  Unfortunately, the subsequent decline in gas prices has reduced the incentive for people to buy small vehicles. With a permanent tax of $1.50 or higher, the incentive for buying fuel-efficient vehicles would also become permanent.

Additionally, a gas tax would encourage more investment in alternative sources of energy and cleaner fuels, because it would make them more competitive economically.

The government already collects the gas tax and wouldn’t need any new administrative capabilities to enforce a higher tax rate. Gas stations already comply with the tax; a simple increase in the rate would not require additional regulation for them or any other small businesses.

A new carbon tax could also be levied on large electric companies that have the administrative resources to comply with it, so that energy used both in the home and car is subjected to the same level of taxation.

Still, you ask, if Republicans are refusing to support “cap-and-trade” because they equate it with a tax, why would they support an outright increase in the gas tax and a new carbon tax?

They wouldn’t, unless it was offset with a reduction in some other tax.

It is commonly understood that taxes are a disincentive. If you tax something more, you get less of it. So why not use taxes as a disincentive for something we all want less of – fossil fuels – and use the revenue to reduce a tax that currently acts as disincentive for something we all want more of — jobs? Why can’t we come to a grand bargain on energy in which Republicans agree to raise taxes on fossil fuels, and Democrats agree to use the revenue to reduce the payroll tax – the most regressive, job-destroying form of taxation? Why can’t we spur our economy towards more energy innovation and efficiency, without affecting a net tax increase on American families?

Perhaps we could, if our president would just lead the way.