Complaints that the ETS will impose higher costs on us seem to have missed the point – that’s what it’s supposed to do.
Imposing higher costs on activities which cause emissions is designed to provide an incentive to change behaviour which will lead to reduced emissions.
Matt Nolan at The Visible Hand in Economics puts it simply:
Even if you don’t believe in global warming, we have a liability that is based on carbon emissions. As a nation, either people who produce the carbon pay for it – or everyone pays for it through higher taxes.
So here in lies the question – do we want higher prices for carbon goods or lower incomes because of higher taxes? Given that the liability is a function of the amount of carbon we produce, it follows that pricing carbon on the basis of this will lead to the “best” solution – no matter what political party you support.
If the cost of something rises, it doesn’t follow that consumers’ costs will increase by the same amount.
If the price of fuel and power go up, we have a choice about paying the increase or using less. Saving fuel and power will save money.
Using less energy and using what we do use more efficiently makes economic and environmental sense whether or not you think the climate is changing.