Don’t listen to shock jocks on carbon

In other words, as soon as possible we intend to pass control over to the same financial wizards whose trading of derivatives recently brought the world financial system to the point of collapse. What a great idea.

In this emissions trading scheme, companies that find ways to reduce their pollution will make money by selling permits to pollute and big polluters will have to spend money to buy permits. The forces of supply and demand for permits will set the price. But the golden rule will be: the less a firm pollutes, the better off it is.

In actuality, the same thing will happen to any Australian carbon dioxide trading market as has already happened to the Chicago (now closed down) and European (hopelessly corrupt) exchanges.

As the commodity  - which, remember, is a piece of paper that represents a colourless, odourless, tasteless, invisible and beneficial trace gas - changes hands, every man and his dog will clamour to clip the ticket, and the market will be rife with speculation and corrupt trading.

Overwhelmingly our nation wants to act on climate change but some worry it won't be good for us if we get out in front of the world.

What Australian citizens want the PM to act upon is to ensure reliable and cost-effective energy supplies, to stem the escalating cost of living and to indulge in good environmental stewardship. Imposition of a carbon dioxide tax will have exactly the opposite effects.

They don't have to worry because the world is moving too.

Just this month the U.K. Prime Minister David Cameron pledged to cut his country's emissions by half by 2027.

New Zealand's Prime Minister John Key is enhancing a carbon trading scheme that has been in place in New Zealand since 2008. On May 29, the U.S. state of New Jersey announced its withdrawal from the Regional Greenhouse Gas Initiative, a market designed to reduce carbon dioxide emissions in the U.S. Northeast.

Meanwhile, Russia, Japan and Canada have told the G8 nations that they will not join a second round of carbon dioxide cuts under any continuation of the Kyoto protocol, and the U.S. has reiterated it intends to remain outside the treaty. The reason is because the rest of the world, outside of Europe, has chosen not to implement penal imposts on coal-fired power stations, nor to tax carbon dioxide more generally.

Western governments are in fact moving in precisely the opposite direction to PM Gillard’s demonisation and intended taxation of an environmentally beneficial trace gas.