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A PROMINENT member of Congress has proposed a comprehensive national climate-change plan. It’s only 28 pages long, it’s market-based, and it would put money into the pockets of most Americans.

This is not the first time that Rep. Chris Van Hollen (Md.), a House Democratic leader, has made the point that the best climate-change policy is not complicated. He introduced a similar plan in 2009. The underlying logic is older still: Since the beginning of the climate debate, mainstream economists, left and right, have argued that the best way to cut greenhouse gases is to use simple market economics, putting a price on emissions that reflects the environmental damage they cause.

As economists see it, the nation is giving a massive implicit subsidy to the users of fossil fuels, who fill the air with carbon dioxide, imposing real costs on society, without paying for the privilege. Make users pay for the carbon dioxide they emit and they will waste less energy, while investment will flow into low-carbon technologies. The nation would obtain emissions cuts at a minimum cost to the economy.

This is Economics 101, but Republicans have largely ceded the free-market arena to Democrats such as Mr. Van Hollen. His proposal would put a limit on the country’s greenhouse-gas emissions, a cap that would decline each year. Beneath that cap, companies would have to buy permits for the emissions their fuels produce. The buying and selling of permits would set a market price for carbon dioxide. The government would rebate all of the revenue from selling permits back to anyone with a Social Security number, more than offsetting any rise in consumer prices for 80 percent of Americans. Most upper-income people, who use more energy, and government, which would get no rebate, would pay more under the plan.