With the Waxman-Markey cap-and-trade bill faltering, the lesser-known Cantwell-Collins cap-and-dividend bill is gaining traction as a more politically viable approach to climate protection legislation.

Sponsored by U.S. Senators Maria Cantwell (D-Wash.) and Susan Collins (R-Maine), the measure brings a concept into the mainstream that economists have discussed for a few years now. The main provisions:

•  It would place an absolute annual cap on carbon emissions for the United States as a whole. This cap could and should be a lot lower, but it’s a start.

•  It would require aspiring polluters to bid for a limited number of auctioned “carbon permits.” (In many of the previous climate bills kicked around Congress, these permits were simply given away to the biggest historical polluters.)

•  It would return three-quarters of the auction revenue, on an equal per capita basis, to all U.S. residents in the form of an annual dividend check. These dividends have been estimated on the order of $1,000 per person every year.

•  It would invest the remaining one-quarter of revenues in clean energy research, assistance to workers put at a special disadvantage by emissions reductions, and the like.

Research from the Political Economy Research Institute at the University of Massachusetts-Amherst shows that for all but the richest U.S. families, these benefit checks would more than compensate for increased energy costs (see a series of studies by Boyce and Riddle: a state-by-state analysis, “keeping the government whole,” and impacts by income level).

Even The Economist gives Cantwell-Collins a rave review. Yes, it’s the “free market” solution, or at least the solution some free-market types like to hype that way. But even for economists who find the “free” market to be tiresomely overrated (I’ll take a domesticated market over a feral one any day), Cantwell-Collins looks like a great first step towards an adequate U.S. climate policy. While I’m not at all convinced that dividends are the only way to use carbon revenues well, this is light-years ahead of the “giveaways” in cap-and-trade policies that are essentially a handout to big business.

Is it too optimistic to hope that the populist sensibility of cap and dividend (checks for everyone!) will create a badly needed bridge across the chasm between center (often mistakenly called “left”) and right in Congress?

For more on cap and dividend in general and Cantwell-Collins in particular, see this terrific series of theREALnews interviews with Jim Boyce.