It seems to me that another unintended consequence of the CPRS that no-one seems to have given much thought to, is its impacts on agriculture and food security.

First of all, credits for sequestration - essentially, growing trees to store carbon. While the image of lots of lovely forests springing up around the countryside obviously appeals to the urban green set, it could have devastating impacts for agriculture.

As we have seen in Tasmania, with managed investment schemes for plantation forestry, providing an easy financial incentive to grow trees has led to prime agricultural land being taken over for forestry largely for the benefit of wealthy city dwellers wishing to minimise their tax. It doesn't take a great leap of imagination to see the same people seeking to minimise their carbon bill in the same way, nor of farm land being taken over by large carbon credit brokers.

The second issue is the use of fertilizers. The CPRS gives a clear disincentive to farmers using conventional - and highly productive - farming methods, instead providing an incentive for organic farming. Again, this may be ideologically appealing to the Green Left, but it would be devastating for agricultural productivity.

I agree with banning international offsets, despite being a plank of the CPRS. There may be less mercenary ways to reduce deforestation in PNG, the Amazon basin or wherever. These include green certification for timber and palm oil or direct assistance to indigenous people. Threats by some industries like aluminium smelting to decamp to China may be hollow. The sunk costs are huge and advantages in the new country may be short lived. I suggest keeping the carbon tariff option on standby to see if it is needed after 12 months.

Perhaps it would be simpler just to start with a simple $10 a tonne CO2 tax no offsets no free permits. That would be on any industry that can be measured so it would exclude cow farts. Oh no the Vics will cry brown coal fired electricity will go up 1c a kilowatt hour. Well knock a few million of the spring racing carnival prize money. Most of these problems can be gotten around it just takes a bit of political nerve.

1. The vast majority of permits will actually be used not traded.
2. Industries in the west that produce high value products will pay handsomely for permits from developing countries. This will inflate the price and supply developing countries with much needed cash.

Countries in the "late/no mover" categories should be hit with high tariffs and duties. This will force them to act and level the playing field. Any tariffs etc levied go to the importing countries coffers rather than the producing country. Free trade dogma must be suspended when it comes to climate change issues.
Taxing carbon would go against the current "small government/nanny state" sentiments held by many. Would it be such a good idea to gift governments with such increased power and spending and expect them to use it wisely?

And let's not forget the third 'fatal flaw': they are a solution without a problem. As the public becomes more cynical about the whole AGW scenario, expensive nonsense like the ETS will become an embarrassing burden for the parties concerned. The AGW movement is losing about 20% of its support per year, so the end cannot be far away; the Libs are obviously hoping to jump on board when the bandwagon changes direction -- and good luck to them if they can save us from this expensive blunder. The Howard Government certainly dropped a few pricy clangers in its time, but nothing of this magnitude.