Isramart LLC: Push to tax carbon consumption instead of production

IsraMart LLC news:

An emissions trading scheme based on consumption rather than the production of emissions is being examined after the collapse of the Copenhagen climate change talks, The Australian Financial Review reports.

The scheme is believed to be the subject of renewed examination at the bureaucratic level, notably within the Department of Climate Change, but it is not believed to form part of the government’s developing plans to find what sources say needs to be a “simple but credible” suite of measures to show the government is serious about global warming.

A consumption-based emissions trading model – akin to a GST model versus an income tax model – has been advocated most forcefully in Australia by Canberra economist Geoff Carmody.

Charging people for their consumption of greenhouse gases, rather than their emissions, has potential advantages in that there is no need to compensate industries for the cost of their carbon permits because they simply pass on their costs to customers.

Without the cost of compensation, the pool of funds to compensate households for higher electricity charges, for example, with income tax cuts, is much greater.