The world is moving to a global carbon trading regime. It should reconsider and look at a carbon tax instead. Cleaner, and less susceptible to vested interests cutting deals with politicians. A bit gets handed out here, another there and soon the entire system becomes unworkable. The good thing about a carbon tax is it's transparent and it gives business certainty.

It's neatly summed up by Timothy Hurst at the Red Green and Blue site.

Hurst lists six reasons why a tax is better than cap and trade. First, a tax provides more certainty for revenue generation for government. Secondly, cap and trade is a tax anyway. Thirdly, there is the risk of carbon market becoming a bubble. This market could reach $2 trillion in five years and with speculators moving in and creating risky or low-value carbon credits and driving up the price of permits, a carbon market bubble would have the potential to make the meltdown in the US housing market look like a picnic. We have no idea how to regulate the market, cap and trade is so complex that a tax might be easier to sell politically and finally, the cap and trade scheme in Europe has not actually lowered emissions.

Whichever way you look at it, a cap and trade scheme will create more problems with disastrous results. A carbon tax is safer.