Global Warming and Sequestering CO2

There's much talk (as opposed to action) about what to do about global warming and CO₂ in the atmosphere. As with most subjects in life, I have all the solutions. While I don't think my solutions are unique, I don't think I've summarized it all in one place yet so I will do that here.

Premise:
Before we begin, I think it's key to understand and agree what the problem is. There are a few points which I think are largely agreed upon. First, humans are releasing formerly sequestered carbon into the atmosphere. Second, CO₂ is a greenhouse gas, which traps heat. Lastly, that there appears to be changes in the Earth's climate. What I think is still being argued (not debated) is if the human released CO₂ is the cause for the change. Since this argument has become politicized it's unlikely anyone is going to change their opinion because of anything they read, particularly some dude's blog post. With that in mind, the premise I'll be operating from here is that we wish to reduce CO₂ levels in the atmosphere. What is the best way to do that?

Background:
It is important to understand what affects CO₂ levels in the atmosphere. Earth is largely a closed system. It gains energy from the Sun, but the matter on it remains basically static. There is virtually the same amount of carbon on Earth today as there has been for thousands and millions of years. What changes is its form, and location. Essentially carbon can be classified into three forms that we care about. First, CO₂ in the atmosphere. The level of this is what we wish to reduce. Second, locked up temporarily, usually in plant or animal form. Biomatter is made largely from carbon, which is released when those things die and decompose (or when other life consumes those things and uses them for energy). Last, sequestered long term in a stable form, usually as fossil fuels. A key point to take away from this is that while we don't directly care how much carbon is in the last two forms, it is of indirect importance as any carbon in those forms will necessarily not be in the CO₂ form we are trying to reduce. With that in mind, it becomes clear that in order to reduce CO₂ in the atmosphere we must increase it in the other two forms.

Carbon Cycle:
One often hears people refer to the CO₂ released when animals exhale. This is usually said rather jokingly, and the overall amounts are quite small, so even if it was a legitimate source it wouldn't be of much concern. However, I feel it's important to show why it wouldn't matter even if the levels were much higher. In short, the CO₂ you are exhaling came from a plant, and that plant captured that CO₂ from the atmosphere. Since the CO₂ was never in a long term sequestered form it doesn't matter that has been released. Even without animals to consume plants and release their CO₂, they would still die and decompose, and the end result would be the same. This freed carbon will be reclaimed by a different plant and the process will begin again. This is the carbon cycle, and it should be clear that the only thing that matters as far as the carbon cycle is concerned is how much carbon is locked up as biomass. Since the total biomass doesn't change much, this amount should be largely static. While there is a tendency to remove (denser) plant biomass in favor of (less dense) animal biomass, this is a largely finished process in the developed world.

Sequestered Carbon:
While the carbon currently stored in biomass is significant, the carbon which is stored in a stable long term form is of greater concern. For all practical purposes, this means fossil fuels. When fossil fuels are burned carbon is released as CO₂, and unlike with biomass, this carbon had been removed from the atmosphere for millions of years. As we burn carbon to fuel almost all of our activities this is a growing problem. We are continuously adding carbon into the atmosphere which had previously been removed. If we wish to maintain a constant CO₂ level we must either stop releasing CO₂ (unlikely) or start resequestering it at the same rate we release it.

Solution:
The solution begins with a carbon tax, which is far from a novel suggestion. The key point of my proposal, though, is that this money wouldn't simply go into the general fund, which would then only give an incentive to government to encourage carbon release (as it is a source of income) and would do nothing to actually help the problem. Instead, this carbon tax should be used to pay for sequestering of carbon. Determine the cost to sequester a ton of carbon, and add that cost to the amount of fuel that contains a ton of carbon. Use that money to actually sequester carbon, and nothing else. This will serve to internalize the currently external cost of CO₂ in the costs of cheap fossil fuels. That will discourage their use, and the free market will find the most economical solution. This is better than wasting the money on something like 'promoting environmental awareness' or some such nonsense that accomplishes nothing besides spending money.

DIY:
There is a second key aspect of my proposal. The government would estimate the cost to sequester a ton of carbon and use the carbon tax to pay for this operation. However, the sequestering of carbon would be open to everyone. Any company that could show that they were capturing CO₂ and sequestering it in a long term stable form would be paid the price per ton that was taxed. This would drive innovation into cheaper methods of sequestering. A guarantee that the price would not change much per year (perhaps a cap of no more than 1% per year), would provide a motivation to seek out a patentable breakthrough that would allow for a significant profit during the time it took for the rate to adjust. As the program would be open to anyone, and the likely cheapest place to sequester carbon would be where it is highest in concentration, anyone burning fossil fuels would have a strong incentive to capture it before it ever went into the atmosphere in the first place.

Costs:
Before writing this post I had assumed sequestering costs would be quite high. Indeed, I expected any tax would likely have to be phased in gradually. Looking for numbers gives a wide range. However they seem to center around $80-$100 per ton, with the full range I saw being $10-$150. The question then becomes how much CO₂ is released by common fuels? Wikipedia plus Google calculator tells me that a gallon of gasoline holds about 0.01 tons of carbon, and a kWh worth of coal holds 0.0004 tons. Using $100 per ton, that means a tax of $1 per gallon of gasoline, and $0.04 per kWh from coal. This is honestly much lower than I expected. Keep in mind that there is currently an average of $0.50 in taxes per gallon of gasoline in the US. It would seem that the US could be totally carbon neutral with relatively little additional cost.