carbon tax - unintended consequences

I was talking to a chap last night who runs a small foundry making specialised cast steel components. The foundry survives Asian competition by being smart and high tech enough to compensate for higher wages.

The foundry melts scrap steel using electricity. When electricity gets more expensive he can't pass on prices because he has to compete with the Asians.

His business is becoming marginal with higher electricity costs. A carbon tax may close him down. If he is closed down he won't be able to sell his business or machinery.

His employees are specialised but there will be no other foundries to work in either. These long term, skilled pattern makers and foundry workers will have to change careers. Green jobs I suppose, barristers perhaps.

Its not only big businesses like steel and cement who need to be protected. The little guys without lobbyists need to be protected too.

bacci