Good good article Geoff (if a bit disjointed). I think that all major emitting nations will inevitably have to join an international fixed price scheme. It's a matter of when not if. Such a scheme will be similar to the existing one we have here, without the exemptions for certain classes of industry.

Why? Because generators and industry will demand certainty to make good investment decisions.

It's a shame that no government has so far had the intestinal fortitude to bite the bullet and go with a permanent fixed pricing scheme. I guess Australia is too small a player to be the first, but at least we have demonstrated that it can be done at least for three years. Our current scheme shows how what amounts to a revenue neutral tax can work. I just wish they'd left out the whole carbon trading thing.

PS. There would still be a market for voluntary offsets and local agricultural offsets can be allowed in a fixed price scheme as long as their price was also fixed in line with the scheme price (as they are with the existing Carbon Farming Initiative).

Good article and good points. Your article makes it pretty obvious that the government’s scheme is not about reducing carbon emissions. It is about revenue, wealth redistribution and politics.

Furthermore, it seems that the whole idea of pricing carbon is flawed and cannot work as intended for the reasons explained here: http://jennifermarohasy.com/2012/06/what-the-carbon-tax-and-ets-will-really-cost-peter-lang/ .

You said:

“First, some Economics 101. Increased prices reduce power demand (and thus emissions).”

That is only true within the country. Increasing power prices does not necessarily reduce global emissions. It could increase them.

Furthermore, raising the cost of fossil fuel electricity generation in Australia, or even in the developed countries, is not what is needed to help the world to reduce global emissions.

What is needed instead is for the developed countries, and especially the USA, UK and EU, to remove the impediments that prevent the world having low-cost nuclear power at a cost that is competitive with fossil fuels.

The high cost of nuclear power has been caused by 50 years of anti-nuclear activism led by so called Greenies. It is up to these people and groups to swallow their pride, recant and then lead the move to remove the impediments to low cost nuclear power.

"The high cost of nuclear power has been caused by 50 years of anti-nuclear activism led by so called Greenies. It is up to these people and groups to swallow their pride, recant and then lead the move to remove the impediments to low cost nuclear power."

Impossible Peter; the moral arrogance of the green mindset allows for no such admission of error; they are the chosen ones of the Gaia, don't you know!