An interesting analysis, Mark. While agreeing with your data on the causes of recent power cost increases, I think that you miss one interesting point and muddle your prognosis with your reflexive anti-Labor stance.

The interesting point is that the idea of a carbon tax (by any name) is supposed to provide a market signal, triggering alternative purchasing preferences, such as energy efficient devices, reduction through organisational change, alternative sources etc. It appears that the implied $30/tonne "tax" from increases imposed by the industry itself has had little effect on demand- at least to date. Maybe it is smart of the Federal government to let these price increases run their course- the increases are the same, no matter who imposes them- and the Government doesn't have to take all the heat- rather like the banks and interest rates. Perhaps more analysis of the effects these increases is needed, although I think that they will find that the demand is fairly inelastic in the short term- all the elasticity seems to be exercised in blaiming governments.

The idea- which seems to be widespread- that the taxes should be returned to the consumers seems economically self-defeating. Certainly, our welfare policies need to be continued in this area- mitigating the problems of the less fortunate, but returning funds to the middle class and industry will only serve to reduce the intended market signal.

I think that Mark is not entirely correct with his comments on China. I have seen what they are doing and it is big. Certainly, they are prioritising economic growth, but working on many fronts to reduce their "average energy intensity", by all the methods referred to above. And building some new industries as they go, too.

Mark also raises, once more, the issue of Australia's size and therefore (in)significance, in this issue. As Garnaut pointed out in his Report, this is a classic "free-rider" problem. We could equally well argue that we shouldn't be in Afghanistan, contribute foreign aid or conduct scientific research. We do it because we are global citizens and good citizens don't free-ride.

Mark Lawson here

Jedimaster - I don't say anything about politics one way or another. What I do say is that the Labor government risks political disaster in imposing a carbon tax, particuarly given what's already happened. If you object to somehow returning most of the money to the consumers, which is just a suggestion I repeated, then effectively you are closing off any hope of a carbon tax.

Faced with an additional tax, which they can identify as a tax imposed by the govenrment, consumers will suddenly become a lot more right wing, and never mind what you suppose my politics to be.

As for China, sorry but you are deluded. They have agreed to increases in energy efficiency, but it is impossible to check whether any of those targets are being met. In any case, the vague promises made do not add up to a reduction in emissions. You are reacting to carefully controlled news releases.

I agree with Mark, as soon as it becomes a difficult policy to implement, i.e. their voters don't like it, it will be committeed and reviewed to death as is happening with the Murray basin recommendations.

As for the free rider analogy, I agree that we should not be free riders, however, going it alone, as a tiny nation, will get us no kudos and only the right to feel smug. The cost to the economy would vastly dwarf any foreign aide or assistance.

Mark, as long as you have no interest in real policies to reduce emissions - you've consistently made it clear you don't think there is a climate problem - I can't take your critiques of climate policy seriously. It's the success of those like yourself who disbelieve the problem - in promoting delay and watering down policy - that we've gotten and continue to get policy that is inadequate and ineffectual. Using that as some kind of evidence that all policy is inadequate and ineffectual and even worse 'mad green' policies are waiting in the wings isn't unexpected from someone with your views.

Looming problems of climate change, sustainability and environmental degradation are all too real and the worst policy is to pretend they don't exist and oppose all serious efforts to address them. The rise of the Greens is a response to the utter failure of mainstream politics to deal with them effectively. I doubt if I'm alone in wanting to see genuine action rather than watered down greenwash from mainstream politics.

The truly mad schemes are ones that presume that all the scientific advice from every leading institution that studies climate is wrong, bet our nation's and planets future on that being the case and promote the view that it's in our long term interests to do nothing about emissions

Pity we don't have you as World Dictator, Ken. Think how much better off the world would be with your religious wisdom at the helm.

First, I generally agree with Ken Fabos' comments.

Now Mark: There are a number of intertwined issues here- let me try to unpick them. First, there is the crude political issue. I probably agree with you, in that it is now so fashionable to bash governments, that applying (watch my language- not "imposing") a new tax could be fatal- particularly if the commentariat insist that it is so, and indulge in pop-poll analysis rather than proper policy analysis.

Secondly, if people and companies know that they are going to get their taxes back, they won't change their preferences. However, if the taxes are used to invest in genuinely (carbon) energy conserving technologies, then there is a double gain- the immediate price signal is up, while the long term issue is addressed. Emphasis on "genuine", as not all technologies are going to be effective. Even better in the short term is for the Government to pull the tax money out of the system- the reverse of "quantitative easing". Money is a proxy for energy, no matter who spends it. Even if the energy conserving measures are genuine, they will take money/energy in the short term. Therein is a problem that has not been addressed.

Thirdly, China- I've been there, I've been involved with renewable energy for 40 years and I can believe my eyes. For example, China has more solar water heaters per capita than Australia (and Australian designs at that). Solar water heaters make good sense now, even if solar cells are still about a decade from grid parity. China knows that energy waste is bad economics- but as I said, they are trying to balance priorities- including screwing the USA. And I did say "average energy intensity"- which is what the Chinese say they are aiming at- that is not the same as absolute reductions in the short to mid term.

While the NeoCons can successfully turn every prospective investment in nation-building into "another great big new (socialist) tax" bogeyman, then we will continue to languish as the once "poor far-east" becomes the "rich near-north".