Jim — You are right that there is a tradeoff between how fast we want to decarbonize and the rate at which the cost of low-carbon technologies falls. You might be interested to know that the Kotlikoff model does include equations that posit a constantly falling cost of low-carbon energy. But that does not mean it is impossible that costs will fall even faster than they expect.
The real point here is that climate policy is an exercise in risk management. There is a risk that we will not do enough today, and a risk that we will do too much. The precautionary principle that drives much of the climate debate holds that the risks of doing to little are catastrophic, whereas the risks of doing too much only mean a slightly lower standard of living for future generations who will, in any event, be far richer than we are.
A couple of quibbles:
(1) I think that you car that runs on fossil fuel and then spits out more fossil fuel as waste is not just a technological challenge, but an actual violation of the laws of physics.
(2) When you talk about future generations as “saddled with debt,” remember that when they pay off that debt, they will not be paying the debt to us, but rather, to future bondholders who are members of the same future generation. Any repayment of the debt will be within the generation, so the generation as a whole will not be “saddled” with anything. Furthermore, if the future generation feels unfairly “saddled,” they would have the option of treating those bonds as odious debt and defaulting on them.