Peter Barnes’ proposal is popping up everywhere these days, most recently in U.S. News and World Report. The idea is simple: Put a cap on emissions, and divide that cap into permits. Sell those permits upstream — mostly to just a few hundred fossil fuel producers and importers. They in turn will pass the cost of those permits on to consumers. Divide the revenue from the auctions among consumers, which makes up for the higher prices.
Read the article for details.
Update: “Rebate” changed to “Refund” as GreyFlcn suggested.