Efforts to cut emissions of the heat-trapping gases are gridlocked over a misunderstanding about what is fair. This misunderstanding is hindering climate change legislation in Congress and threatens to torpedo international negotiations in Copenhagen next month.

We propose a new way of thinking about climate fairness that focuses not on emissions cuts but on meeting developing countries’ energy needs in a climate-friendly manner. This simple narrative can provide a framework for U.S. legislation and open the way for international collaborative efforts to avert climate catastrophe.

At present, many people in the United States focus on the large and growing emissions of the developing world, especially China, which in absolute terms is now the world’s largest source of greenhouse gases, and India, which is growing fast and like China relies heavily on coal. They argue that it would be unfair to force emissions cuts at home without similar cuts in developing countries. A recent poll found that 60% of Americans believe that in any climate agreement China should cut its emissions the most.

It is true that developing countries already account for roughly half of all greenhouse gas emissions, and that their large populations and rapid economic growth are boosting emissions fast enough to create a planetary crisis by 2050-even if today’s rich countries had never existed.

But meanwhile a quarter of humanity — including millions in China and India — live without any electricity, and one-in-three people on the planet rely on straw, brush, charcoal and animal dung for their cooking needs. The resulting indoor air pollution kills 1.5 million people a year — about 4,000 per day — mostly children. Power for small businesses, irrigation networks, clinics and schools is sorely lacking.

Developing countries point to these unmet energy needs and to large disparities in per capita emissions to argue that the rich world must move first. They note that the 20 tons of CO2 that Americans emit annually is five times the world average, well above both China (5 tons per capita) and India (below 2 tons per capita).

They see emissions as inseparable from economic growth and argue for the developing world’s “right to pollute.” Some argue that because most of the extra heat-trapping gasses in the atmosphere were put there by the United States, Europe, and other industrialized countries, wealthy nations should pay “reparations” for the damage inflicted on poor countries.

Rarely in history have we seen constructive solutions come out of such blame games.

We believe that both sides should shift their focus from negotiated emissions cuts to a joint effort to find ways to rapidly meet the developing world’s legitimate energy needs at low cost in a carbon-constrained world. How can we change to this mindset, adopt a story line that would lead ordinary people in rich and poor countries, and the politicians and negotiators who do their bidding, to do the right thing?

Wealthy nations, starting with the United States, should affirm that, for any given income, people in developing countries have the same rights to energy-based services as those in the rich world-and then offer to help them obtain those energy-based services at the lowest possible cost and with the lowest possible CO2 emissions.

This should apply not only to existing technology, but to a war-footing approach to the development and deployment, at home and abroad, of new emissions-reducing and efficiency-enhancing technologies — solar, wind, tides, algae-based biofuels, smart grids and buildings — similar to the technology push of World War II.

The long-overdue climate speech by President Obama, explaining why action is urgently needed and why the U.S. must lead, would be a good place to start, and could help to open the way for progress in Congress and in Copenhagen.

For their part, developing countries should stop talking about a “right” to emit CO2, emissions are after all merely a waste product. Instead, they should insist on their right to energy-based services appropriate to their level of development — to light, and heat, and refrigeration, for starters, and then, as per capita incomes rise, to elevators, climate-controlled homes and workplaces, computers and, yes, flat-screen TVs.

To make this level of energy services possible without destroying the planet, developing countries should press the rich world for massive public funding of green energy research, and for full and rapid access to all resulting new technologies.

Framed this way — in terms of a U.S.-led push for equality of energy opportunity — it’s hard to see how Americans and others in the rich world could fairly object. We think they would agree, because it’s the fair thing to do and because it’s in their own best interest.

A few days before the election, Barack Obama told Time’s Joe Klein:

Finding the new driver of our economy is going to be critical. There’s no better driver that pervades all aspects of our economy than a new energy economy … That’s going to be my No. 1 priority when I get into office.

That’s exactly the right choice for numerous economic, geopolitical, and ecological reasons. By spawning “a new energy economy,” Obama can create millions of new jobs, decrease our dependence on foreign oil and avert catastrophic climate change. But the politics of launching that new energy economy — even with enlarged majorities in Congress — remains challenging.

In facing this challenge, Obama will be constrained both by a gargantuan budget deficit and his campaign vow not to raise taxes on anyone making under $250,000 a year. And because of the recession, he can’t suck buying power out of the economy. On the contrary, he needs to stimulate spending by consumers.

He also faces a tight international timetable: in December 2009, the nations of the world will assemble in Copenhagen to negotiate a successor to the Kyoto Protocol. If Obama is to have any credibility in those negotiations, he must pass significant legislation before then.

How, then, can he fulfill his No. 1 priority?

There are many opinions about what should be part of a comprehensive energy policy, but the centerpiece nearly everyone agrees on — the great lever that will tip the whole economy toward clean energy — is a strong, descending cap on carbon emissions. If done correctly, such a cap will raise the price of polluting, spur innovation and conservation, and shift billions of dollars of private investment into new technologies for the next 40 years. But designing the cap correctly is critical; a half-baked, loophole-ridden and overly complex system will do more harm than good. The devil is in the details — and, of course, in the politics.

The most critical details involve where to place the cap and what to do with the permits the cap will create. The simplest and most effective place to put the cap is upstream — that is, on the small number of companies that bring carbon into the economy. An upstream cap could be administered without monitoring smokestacks, without a large bureaucracy, and without favoring some companies over others. It would work for the obvious reason that, if carbon doesn’t come into the economy, it can’t go out.

The declining number of permits that would be issued under the cap should then be auctioned rather than given away free — all polluters would pay, and there would be no politically chosen winners or windfall profits. Fortunately, Obama pledged during the campaign to do just this. But that leads to another crucial detail: what to do with the auction revenue, which over time will total trillions of dollars?

There are two possibilities: spend the money on a variety of energy-related programs, or give the money back to the people. While there’s broad agreement that some public spending is necessary to solve the climate crisis, it’s by no means clear that permit revenues should be used for that purpose. The reason is that permit revenues, though initially paid by energy companies, are ultimately paid by consumers in the form of higher energy prices. They are, in effect, a sales tax on carbon — a tax that will fall on millions of Americans earning under $250,000 a year, and that will rise as the cap tightens.

Obama’s best choice is to fund energy-related programs from other sources (including long-term debt) and return all the carbon revenue to the people. This can be done through yearly tax credits, or better yet through monthly cash dividends wired like Social Security payments to people’s bank accounts or debit cards. The advantage of cash dividends is that they’d tangibly and frequently remind people that higher carbon prices are coming back to them — and help them pay mortgages and other bills that fall due on a monthly basis. The whole system might then be called “cap-and-dividend” or “cap and cash back.”

Like Social Security benefits, carbon dividends would be taxed as ordinary income; the government would then recoup about 25 percent of the revenue and could use that money as it sees fit. More importantly, ordinary families would get the lion’s share of the auction revenue, and get it in a way that rewards conservation. Since everyone would get the same amount back, those who use the most carbon would lose and those who use the least would gain — their dividends would exceed what they pay in higher prices. Low-income families in particular would gain because they use less energy than others and would pay little or no taxes on their dividends. In addition, the overall economy would benefit from this periodic replenishment of consumer demand.

The most persuasive argument for cap-and-dividend, though, isn’t economic but political. As the presidential campaign revealed, energy prices are an explosive issue. A carbon cap will raise fuel prices not just once, but for years to come. The potential for backlash — for frenzied cries of “Drill, baby, drill!” — is never-ending. If America is to reduce carbon emissions to the level scientists say is necessary, it’s crucial that families’ pocketbooks be protected for the duration. Cap-and-dividend does this by permanently linking dividends to carbon prices. As carbon prices rise, so — automatically — do dividends. If voters scream about rising fuel prices, as they surely will, politicians can truthfully say, “How you fare is up to you. If you guzzle, you lose; if you conserve, you gain.”

Moreover, for a carbon cap to endure, it must have broad bipartisan support. A revenue-neutral cap is far more likely to garner Republican support than one that’s linked to a large increase in government spending. Consider, for example, Senator Bob Corker of Tennessee, who supports a declining cap on carbon but not a spending bill that earmarks trillions of dollars over 40 years. Though it’s not glaringly evident, there are more Republicans like him. This doesn’t mean Obama shouldn’t spend public money on energy; it means he should separate such spending from the cap.

The ultimate reason for paying equal dividends from carbon revenue may be this: it fits Obama’s vision of how government ought to work. In this vision, the government’s job is to serve ordinary people, not special interests. It is to be fair and transparent. And it is to unite rather than divide us, to move us from a “you’re on your own” society to one in which “we’re all in this together.”

Cap-and-dividend fits this vision perfectly. It curbs carbon emissions in a way that’s simple to understand and administer, favors no special interests, and provides a degree of security to all. It treats all Americans as co-owners of the air and allocates trillions of dollars in a completely transparent way. It would be a signature Obama policy, one that sets the tone for his whole administration and remains as memorably linked to him as Social Security is to Roosevelt.

(Pictured above: President Bush walks with President-elect Barack Obama at the White House, November 10, 2008. REUTERS/Kevin Lamarque)