Emissions Trading is a silly way to drive investment to renewables and there is no need to do it this way. Economists only seem to think of using price as their economic tool. They do not think like an investor and so they make these dreadful mistakes like thinking emissions trading is going to work. It will not.

Here is how to think like an investor.

There is plenty of renewable energy sources available in Australia not only for all our energy needs but the rest of the world if they want it.
Once you have a solar thermal or geothermal power plant built its running costs are half the cost of fossil systems (no fuel cost)
The cost of building a geothermal plant is currently about twice the cost of building a fossil burning plant but we know that every time we double the capacity of any engineering system we drop its per unit cost by between 15 to 25%. The cost of geothermal (and solar thermal) will be the same cost as fossil burning plants within 5 to 7 doublings of capacity. We should be able to double capacity every 12 months.

To get the money for the first few doubling of capacity you take a very small proportion of the funds currently collected as profits or tax from the producers of coal, oil and other energy producers and you give it to every Australian BUT you require them to spend the money on building emissions reducing infrastructure. Once the cost of building renewable energy plants is less than fossil plants then coal plants will close.

Do the maths and you may be in for a pleasant surprise. Depending on how quickly you want to do it it is of the order of a couple of cents per kwh for 5 yrs.

All we have to do is to speed up the building plants like Geodynamics is doing with geothermal in the Cooper Basin and Ausra is doing with solar thermal in Arizona - both good Australian ideas and companies.

Pretty simple really.

It is a national tragedy that economists, who would otherwise push for development of Australian industries where they have comparative advantage, e.g. relatively cheap energy, become mesmerised by the greenhouse gas emission mantra and consequently recommend dysfunctional solutions, viz. punitive taxing of Australian energy intensive industries so that they lose their competitive advantage on world markets. It should become obvious that the implementation of any carbon taxes would adversely affect the economy, and consequently, the Australian standard of living.. One can only pray that the Kyoto Protocol nations will become enlightened , and ditch it at the next round.