Kloppers' neutralities of a carbon tax and trade

Comments on Jennifer Hewett “BHP boss Marius Kloppers: It's time for carbon tax”, 16/09/2010, http://www.theaustralian.com.au/business/bhp-boss-marius-kloppers-its-time-for-carbon-tax/story-e6frg8zx-1225924335319
Mr Kloppers' argument for a carbon tax and the principle of revenue neutrality is excellent and should be considered seriously by the government, although revenue should be returned mainly to consumers as opposed to firms because they will bear the bulk of the costs and don't have ways to pass them onto others, and it is very difficult to be clear how much firms should be entitled to any revenue returned.

The argument for trade-exposed industries to have their emissions costs rebated until a global emissions reduction system was in place is also excellent, although it should ideally include both exports and imports in a simple way of accounting and implementation only at the border when international trade takes place. That is another neutrality of a carbon tax – trade.

These two neutralities, as I have argued before, are important for a country to be a leader in dealing with climate change and emissions reduction in the most efficient, effective and equitable way.

Australia can go it early and alone without sacrifice its growth too much in reducing emissions. In fact, it is likely to be in its interest to do so and create some earlier advantages in technologies and in lowering the costs of reduction.

Any changes to the mining tax agreed to before the election by the government and the three biggest miners should only improve the tax to be simpler and fairer to all miners and possibly broad based, but not to increase the overall burdens to them further or unfairly.