The idea is to have the least painful way to introduce a carbon tax. As the current elevated prices fall, a carbon tax would be introduced. The main issue with carbon taxes historically is that they're rather unpopular. They need a spoon full of sugar to make the medicine go down. Therefore this one would have a couple of extra features. One has been explored elsewhere, having the revenue rebated back to taxpayers.
The other feature I haven't seen. It would throttle the tax around a rolling multiyear average of prices from some sort of index. Prices go up, tax goes down. Prices go down, tax goes back up to match. In this way, the traditionally volatile energy market gets a built-in buffer. A fund created by the carbon tax could be used to pay out the rebate at a steady rate instead of sporadically.
How does this sound? Hair brained? Hopeless? Or maybe - just maybe - it has a chance of being workable?