The advantage of a carbon cap is that (absent loopholes) it is driven by a target whereas the physical effect of x% carbon tax is hard to predict. If people stay within the current cap the effect should be benign, assuming voluntary cuts are achievable. Revenue from permit auctions could be used to fund low end tax cuts. Sooner or later I think we will head towards some form of carbon rationing i.e. so many litres per week of petrol or kilowatt hours of coal fired electricity. Step pricing could see a basic allowance at a modest price then higher usage penalised, the base rate set so as to help battlers.

Another equity issue is that China is now saying 'our pollution is your cheap goods'. Maybe we should tax or cap coal and LNG exports or alternatively put a carbon tariff on imported finished goods.

The equity argument completely overlooks the fact that individuals are responsible only for a very small fraction of Australia's gross carbon emissions. Directly through household electricity and personal transportation, only about 25% of greenhouse emissions are from Australian individuals. Over 50% goes to production and transportation of goods for export.

The biggest tranche of our carbon emissions comes from an industry which already receives a massive subsidy from "little people", ostensibly in order to improve its export competitiveness. When state governments announce green power targets, they sagely tell us that this will mean electricity prices are going to increase, but that "trade-exposed industry" will get price relief.

There's method behind this apparently iniquitous arrangement: to tax the carbon emissions of the big exporting polluters could drive them out of business, or out of the country. Aluminium is a big employer and earner of foreign exchange, so the gross cost to the community would be high; though arguably the net economic impact to Australia of its departure would be negligible due to the magnitude of the subsidy and the high proportion of the profit that goes to foreign owners.

An influx of carbon tax revenues would tempt government to cut taxes elsewhere to compensate, without redistributing the money for the purpose of actually reducing emissions in a cost-effective way. Markets are known for achieving economically efficient allocations; government is notorious for pork-barrelling.

To tax carbon emissions directly encourages each business or household to make cuts directly in their own operations, or to pay up if this is easier for them. The actual emissions reductions achieved may be very small if the tax is not punitively high; a cap-and-trade scheme (with progressively reducing free allocations to the big exporting polluters in lieu of their present subsidy) would provide stronger assurance that emissions reductions will be realised. A flat tax isn't a cheap way to reduce emissions: the identification and achievement of the most cost-effective emissions reductions is something best tackled on the microeconomic scale.

The positive thing about climate change is how Australians finally in such a short period have began to connect to dots. Infact when Mike Keelty and people like him stand up for what they truely believe on the subject, it gets even more valuable to be part of a nation working to understand it's own future.

I was even impressed with Mr Bob Cater this week which is a score given I normally don't choose to hear him.

I agree Christian Seibert, Good Work and you are completely right; 'equity impacts policy responses to climate change' and,

"There needs to be a comprehensive examination of these methods by government, to ensure that Australia and the world have both a sustainable and an equitable future."

May we each be mindful of Australia's leadership in the world and be productive in the ways we influence our exchange, particurly smaller economies.

http://www.miacat.com
.

This article completely overlooks the fact that the problem of climate change, is the problem of undoing the harm done by the nonsense of the alarmists.

It is increasingly obvious that the claim of emissions from human activity having any adverse effect is extremely tenuous, and even if there were any basis for it, the effect is miniscule.

Breaking through the obfuscation of NASA in relation to the temperature figures in the US, and having the arch alarmist Dr Hansen concede that the hottest year in the US was 1934, is a huge step in the right direction. Hansen, who had set about giving 2005 the distinction of the hottest year, had to back off. He designated this major defeat, of his alarmist stance, as adjustment of "minor errors"

It may be a minor adjustment to acknowledge that the assertions about global warming are nonsense. It does not matter, so long as it is acknowledged that there is no global warming, of any significance.

The asserted .6 degree warming was paltry. It is now half of that, or less.

Let us not move along to the carbon credit schemes which are now baseless.

We must set about re-education of a populace, left too long to suffer the scurrilous nonsense of Al Gore and the IPCC, and the "slight errors" of the likes of Hansen.

Global warming is not a problem, nor is its meaningless replacement mantra of "climate change".

We do not need carbon credits, or any other scam, to place a further burden on our overtaxed citizens.

Nick, if 0.6 of a degree of warming were all we expected, we would not be shaking in our boots. But it is not a "paltry" warming, taken in context. It marks a sudden and undeniable departure (dating from the 1970s when sulfur dioxide emissions from coal furnaces were mostly eliminated) from the historical norm of terrestrial temperatures closely tracking variations in solar radiation.

The observed warming is mild and unalarming. But it is absolute confirmation of the theory (never seriosuly doubted) that adding greenhouse gases to the atmosphere would cause temperatures to rise. Atmospheric and radiation physics situation indicate that, even if we were to stabilise greenhouse gas levels *now*, warming would continue for several years before the anthropocentric temperature anomaly stabilised.

The real cause for alarm is *not* the current temperature, but the knowledge that (a) direct anthropic greenhouse emissions continue to rise, and (b) after a couple of degrees' warming greenhouse emissions from the "wild" biosphere, and a decline in the ability of the surface layers of the ocean to dissolve carbon dioxide, can be expected. These will lead to "runaway" greenhouse emissions and abrupt climate change, making the present warming trend look like a sunny midmorning stroll in the park.

I challenge you to describe, with credible evidence, what "harm" has been caused by calling attention to this seriously alarming state of affairs.

Your shrill screeching of "scurrilous nonsense" does nothing for your credibility.

EVEN IF the science were completely wrong, the urgent call to reduce greenhouse emissions amounts to little more than a call for investment in technologies and practices which are inherently more sustainable than our present reliance on ever-increasing combustion of ever-declining resources of fossil fuels.

But the science is not wrong; the error is in your interpretation (which sounds to me more like wilful misinterpretation than an honest mistake on your part) and that of other preachers of complacency.

The onus to restrict greenhouse pollution is as urgent as ever.

What a bureaucratic nightmare !
Who is going to check on each companies carbon emissions ?
Aside from the electricity bill it will be near impossible.
Someone will have to examine what each company buys in and how much
emissions is tied up in each product.
Also it will generate many oversea trips for bureaucrats while they
examine the plants of where imports are made.

I know, I know, you are going to tell me they don't have to do that.
They will take them at their word.
I wonder why the European carbon credit system has collapsed ?
They are worth about as much as Bias Finance shares.

In any case it is all a waste of time as there is not enough
hydrocarbon fuels to reach the IPCC projections, except perhaps
the most optimistic projection.ie the lowest temperature rise.