Some very good food for thought here. Thanks Geoff for cogent and clear writing (as usual). Some things I'll have to mull over.
I'm not sure I agree with your prescription (e.g. level playing field that doesn't pick "winners and losers"and treats all non-fossil BTUs or KWhs equally); after all techs come into the marketplace at different price points which don't always speak to their ultimate potential to come down price and learning curves and compete without permanent subsidy after early markets are developed.
We need some way to give every emerging tech an equal chance to thrive, and the conditions to do that may vary by technology. I agree we can't be anointing permanently-subsidized industries, but what we need to focus on is creating the conditions where winners can emerge in the first place. Markets won't do that on their own, especially given many barriers to emerging clean techs. And a single carbon price or per-KWH/BTU incentive price won't solve the barriers for each technology.
For example, if the price is $20 per ton/MWh, wind may win while thin-film solar won't have a chance to emerge at all. Focus on prices alone and those requiring infrastructures that don't match today's energy system won't emerge at all (like charging stations or biofuel distribution or transmission to wind and solar and geothermal resource areas). After all, our current energy system is built to serve (and thus perpetuate) incumbent techs. And so on.
You've got the right concerns I think. But we need more creative thought as to the right solutions. I welcome your thoughts. Cheers,