...the biggest problem, at least politically, is that carbon taxes are transparent and simple, whereas cap-and-trade systems are complicated and conveniently opaque. Under a cap-and-trade scheme, governments can pay off politically powerful polluters (such as the coal industry) by giving them permits...-- this (from Doffing the cap) catches a key point. I've been reminded however (!) that it's far from the first time the point has been made (see, for example, Emission Impossible).
So we know well now that the case for a carbon tax is strong. How broad should it be? I recall visiting six or seven years ago John Flemming (a man of excellent qualities) and listening to him outline the advantages of making it global (acknowledging, however, that politically this was a long way from being a realistic prospect).
The political obstacles -- for proper carbon taxes (or indeed something like the auction proposed in Kyoto2 which, I have argued, shares some features of a tax) -- remain the "real story".
[P.S. A much fuller exploration of the issues now appears on Baconbutty: To cap or to tax?]