I spoke to Larissa Waters (QLD Greens senate candidate) last night. She was also at the other meeting. She had been discussing the issue with other Greens people. I also got an email response from Bob Brown's office which contained more detail. The Greens are the only party to have considered the economic consequences of this decision, or at the very least are the only party that has been willing to communicate their views on the issue. This is very surprising given the attempts of the two major parties to demonstrate their economic credentials, and their tendency to have a form letter on just about everything. As far as I can tell, Labor and Liberal have based their policy on what will sound best in a fives econd media bite. I think Howard still plans to give long term permits away for free to whichever companies can ramp up emissions the most by 2012 ('grandfathering' as The Australian puts it).

There is a reason why your 'model' isn't being adopted...why do you think that is?

Here is a copy of the email I got from Bob Brown's office, and my response:

---

Thank you for contacting Senator Brown; unfortunately his hectic
schedule prevents him from personally replying.

The Taxation section of the Australian Greens' Economics policy
specifies that we will implement a gradual and long term shift in the
tax system from work-based taxes to taxes on natural resources and
pollution including:

- a carbon tax levied on generators of mains-supplied electricity or
gas;

- a national carbon trading scheme; and

- other ecological taxes and charges at a level sufficient so that their
prices reflect the full environmental cost of their production, use or
disposal.

However, I have been advised that a trading system is preferred for the
following reasons;

Firstly, a cap and trade emissions trading system provides a higher
level of environmental certainty (in other words a government has a
higher degree of control over overall emissions levels - a critical
issue if international agreements are to be entered into).

Secondly, if the system is designed well, a trading should be more
economically efficient than taxes (achieving a certain amount of
emission reduction should cost less with emissions trading).

That said, unfortunately, it is possible to design a very bad emissions
trading scheme and in this case, it would be better to have a simple
carbon tax than a bad emission trading scheme, which is why many people
support emission taxes.

Additionally, there is the issue of transport; a carbon price of around
$25 per tonne would have a significant effect on reducing emissions from
stationary energy but virtually no effect on transport fuel consumption,
that is, it equates to just a few cents per litre.  Therefore, the
Australian Greens support a separate tax on transport fuels - based on
the carbon content of the fuel.

Please refer to
http://www.christinemilne.org.au/600_media_sub.php?deptItemID=370  for a
list of features that an emission should feature. Additionally, if you
require further information about this, I encourage to contact the
office of Senator Christine Milne, as she holds the Climate Change
portfolio on behalf of the Australian Greens (her contact details are
available at http://www.christinemilne.org.au/900_contact.php).

Kind regards,

---

Thank you for your response. Do you mind if I post it online?

Your policies of a carbon tax on electrcity suppliers and a general green tax shift are great. However I think your reasons for choosing carbon trading over taxes are based in error.

Your claim that trading schemes result in greater certainty is correct, but all you can really be certain of is that it is worse for the environment than taxes. The speed at which a tax scheme will reduce emissions is unpredictable, but will definitely be faster than a trading scheme. Furthermore, you can increase the certainty by linking it to mandatory emissions reductions target that triggers an increase in the tax if necessary (however unlikely). This ensures that the tax scheme is either as good as or better than the trading scheme.

Here is a list of world renowned economists who share my view:

http://en.wikipedia.org/wiki/Pigou_Club

I also disagree with the claim that a trading scheme would be more economically efficient than taxes. Both taxes and trading schemes require government monitoring of emissions, so there is no saving there. This claim you make is often based on an assumption that 'market based mechanisms' are more efficient, but this is not the case where direct government monitoring remains necessary and where the government interferes in the market by controlling the quantity of an item available. See this link for more information:

http://www.ozpolitic.com/forum/YaBB.pl?num=1191728697

"That said, unfortunately, it is possible to design a very bad emissions trading scheme and in this case, it would be better to have a simple carbon tax than a bad emission trading scheme, which is why many people support emission taxes."

That is certainly not why I prefer taxes, nor have I ever heard anyone else make this argument.

"Additionally, there is the issue of transport; a carbon price of around $25 per tonne would have a significant effect on reducing emissions from stationary energy but virtually no effect on transport fuel consumption, that is, it equates to just a few cents per litre."

This should be taken as a strong indication that emissions reduction measures should be targetted at stationary sources, as this is where it is cheapest to reduce emissions. You can't pick and choose where 'economic efficiency' matters. The environment doesn't care whether the reductions come from transport of stationary sources, but the economy certainly does.

I just spoke to the office of my local ALP candidate. We spoke at length over the various merits of the two schemes. He seemed to prefer carbon trading, but said that the party had not 'fleshed out' those details. They have a report due out next year I think and they will take the advice of their economist. I should be getting more info in the mail.