future of manufacturing, page-13

Any structural change causes pain. There will always be businesses operating at the margins that can't survive another hike in the cost of inputs or from foreign exchange fluctuations. Just like there are new businesses that take advantage of a restructure.

The sooner the carbon price comes in the softer the adjustment.

If it didn't come in for another five years, imagine the pain then. The adjustment would be far greater because the pricing would have to be far steeper to force a shift to renewables. And the uncertainty for businesses in the meantime would stifle capital investment.

As it is, we keep emitting carbon at an accelerating rate and to meet the 5% reduction target by 2020 means we have to cut about 20% off the current usage. If we waited till it was 30%, 40% or 50% cut the pain would be far greater. The carbon price also protects us from future penalties from importing countries, like Europe, who could well charge imports that don't come from a place with a carbon price in the future.

Don't imagine any government would do differently. Whatever party is in government would have to introduce something similar sooner or later. Sooner is much less painful and a much smaller jolt to the economy than later.

It would have been even softer if we'd started a couple of years ago - but it wasn't to be. This system looks preferable than the CPRS so maybe that's not such a bad thing.