Monday, March 1, 2010

Carbon tax or cap and trade?

There are signs that the USA might switch to a carbon tax, if the blogs and op eds are anything to go by. Tom Friedman's column today talks about the new USA energy bill being drafted by Senators Kerry, Lieberman and Graham, with Republican Senator Graham favouring a carbon tax.

If this happens it might be the death knell for Australia's proposed ETS, which could get replaced with a direct tax. So far, the Greens is the only political party touting a carbon tax, with the Liberal Party wanting to use consolidated revenue to fund any carbon-related expenditure.

Maybe this is why Australia's Prime Minister, Kevin Rudd isn't rushing to a double dissolution yet. It gives him time to replace the ETS with a proposal that's easier to describe (and maybe sell) to the public.

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