It seems strange to make carbon intensity the increasing basis of the tax system. Thus on Planet Earth the tax system is based on carbon but on some other planet in the galaxy the tax could be on silicon or whatever. I won't buy into household compensation but I am coming to a view on compensation for trade exposed industries. That view is that we should have carbon tariffs.

Firstly there is the danger that the carbon adjustment will be manipulated as protectionism in disguise. However it seems clear that manufacturing, metals smelting and other heavy industry is going to move offshore to countries that don't give a damn about emissions, 'dirty deeds done dirt cheap'. We send both iron ore and coking coal to China and it comes back as steel. This is not just the low wage advantage but the lack of serious carbon tax in other countries. Therefore that steel should be carbon taxed at the the border, the result being fewer local jobs lost and less emissions worldwide. Border adjustment has to be a key element of compensation.

I would not dream of critiquing Geoff's analysis of carbon tax compensation, but his article underlines, yet again, the absurdity of the government announcing a policy with no details of any kind..

The second best move from here would be for the government to announce some details, although the best move would be to drop the proposal altogether as manifestly pointless.

"This consumption model eliminates the need for messy, expensive and discriminatory 'special deals',..."

What consumption model? This article goes around in such circles as to confuse even Einstein himself, and leads to only one possible conclusion - NO CARBON TAX! and NO ETS!

Offset increased consumption costs by reducing income tax? = C tax has to replace lost income tax = static revenue, but increase in CPI = costs still passed on by producers = no impact on CO2.

Reduce GST rate to reduce C tax impact on CPI? = lost revenue, but increased purchasing power = increased CPI again! (No impact on CO2)

Reduced value of savings, investments, pensions, and superannuation savings = BETTER THINK OF A BETTER IDEA! (No impact on CO2)

Tariffs?, Taswegian - not bad, but will still lose jobs and investment. (Also, no impact on CO2)

Drop the whole idea, Curmudgeon - best idea of the lot. (No impact on CO2, but no unnecessary pain, bureaucracy and confusion.)

When are we going to get real!? IF the idea is to reduce net CO2 emissions then the people will have to decide to suffer some costs - for there are only two available avenues - reduce consumption (which is not going to happen by increasing costs, particularly if there is compensation - did increased tobacco tax reduce smoking? NO), but this reduction can only happen with low emission alternatives, like eco-cars, buses, trains, planes, industry, and, secondly, through introduction of low emission electricity production (in homes, businesses, and power plants). All requires investment, which is not going to happen at the big end of town without a carbon cap and associated penalties, and not generally without government grants or subsidies.

If we do this, but the rest of the world hangs back, then we'll feel good about it but still go to hell in a hand-basket with the rest in the end.

So we are taking money away from people and giving it all back again in order to produce a change in behaviour that will have no effect in solving a problem that is imaginary anyway...

I don't know what Greg Combet is smoking, but I want some.

We do NOT need a "carbon" tax, the government is all ready raking in to much GST TAX it should be no more than 5% !

What we do need is a new political party that has intelligence, integrity and allegiance to our country and its people. We certainly do not have one now, neither Labor, Liberal/National or any other. Whether the carbon production is a problem or not, I can't see how the peurile attempts being sugested is going to achieve anything except another tax, and I haven't seen any intelligence even in the way they are applying the company tax or the personal tax, they still have excessive salaries and other incomes that they complain of, and still have thousands of wage earners who can get work only two or three days a week and our governments chortle over the 5% of unemployment that shows up on their books. The Parties are both trying to destroy each other and the economy as well. We can only hope they succeed in the former.