I am not sure what the issue is actually. If you want city razing to be less penalised, you have to make a module for it. If you want the penalty to be different (but with the same degree of severity) you need to elaborate why the current implementation is problematic and what should replace it.
It Always strikes me as a bit odd that whenever a city is razed so little of all the labour that went into building the city gets converted (you might receive a higher sum of gold when razing a city compared to conquering it, but even that is a guess on my part).
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this part of the (lack of) penalty I would like to be different
a possible replacement
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populace
A certain percentage of the population that disappears from razed cities (perhaps 80%) should reappear as temporarily unhappy citizens "
The evil [civname] destroyed our homes".
The recipients could be the players with the most similar populace (so if a city with pop 10 and 75% Greeks and 25% Romans gets razed by the Persians a The Greek cities will receive a total of 6 citizens and the Romans a total of 2 citizens)
diplomacy
The acquisition of unhappy citizens could be accompanied by a temporarily diplomacy malus. (-1 per citizen received, "You commited grave atrocities against our loyal subjects")
great persons
(some of) The settled great persons in the city that gets razed should be resettled similar to populace (treat each settled great person as one additonal pop) and some should be resettled into a city of the conqueror (with accompanying temporarily unhappiness)
buildings
Every building in the city that gets destroyed after capture(/razing) should yield a percentage of its
in
.
culture
A small percentage of accumulated
should be spread to your cities (eg. 10% of total
5% of
gets added to your capitol, the other 5% of
gets spread around your other cities)
Some of the remaining "disappearing"
could be spread along with the redistributed citizens.
A significan part of the "disappearing"
should be transformed into
(a formula should be used to calculate the amount because a distribution based on proportion alone will probably be a little too good for razing cities with high culture)
unfinished production
Accumulated
(and perhaps also
) gets used to heal units (both friendly and enemy)/spawn partisanlike units (in a (eg. nine tile) radius centered on the razed city).
stability
Some of the razing instability could be transferred to the civilizations receiving citizens to incentivize protecting cities that contain a percentage of your populace.
severity/intermediate option between capturing (and releasing) and razing a city
An additional option to sack the city upon conquest (only raze part of the city, eg half) to force the effects of razing a city, but to a milder degree (less and perhaps milder penalties to happyness and diplomacy)