Letter rejected by the Age (Melbourne)

As the Federal Government is planning an emissions trading scheme — not a carbon tax — why will households foot the bill? (“Householders to bear brunt of trading scheme”, the Age, June 25.)

Answer: An emissions trading scheme is a carbon tax payable not to the government, but to private polluters. As carbon credits become scarcer relative to demand, producers who need to purchase carbon credits will pay higher prices, which they will pass on to you and me. And who will be the beneficiaries? Obviously the sellers of carbon credits — who in the main will have received their credits as rewards for causing greenhouse emissions before the scheme was introduced!

An honest carbon tax would go entirely to the Federal Government, so that taxpayers might be compensated by cuts in other taxes. But polluters’ profits from carbon credits will be taxed as discounted capital gains, so that the rest of us will have far less opportunity for cuts in Federal taxes but will still pay the private tax.