The BCA, Saturday's Australian and many of the weekend newspapers have finally twigged to the notion that charging for carbon emissions will cause discomfit. It will. Indeed, the objective of levying a carbon charge is to generate discomfit. The type of discomfit that will motivate firms and consumers to use less energy, to switch to non-polluting sources of energy and generally to reorient their behaviour so that it alligns with social costs. Some supporters of activist climate change policy in seeking to encourage community acceptance of carbon pricing have played down its costs but yes they are there.
The costs are not - as Ross Gittins points out this morning - overwhelming costs. Large polluters who will feel the effects of carbon pricing can pass those costs onto consumers, can reduce waste and can seek less polluting technologies. The sky will not fall in. Incidentally the proposed emissions trading scheme sets a maximum price for emissions that limits the scale of required firm adjustments. Big business should stop behaving like rent seekers with a belly ache.