GEEK alert: Carbon tax vs carbon trade at the London School of Economics

My friend 'Alex from the AGO' (who doesn't actually work for the Australian Greenhouse Office anymore, cos he lives in London) suggested we go see this debate at the London School of Economics, which is near where we both work.

Geeky, I know, but we're like that.

First thing I noticed was there there wasn't a presentation aid in sight. Some spoke without notes. This was proper old fashioned oratory and highschool-style debating, except that the protagonists were blokes of clout in their 40s and 50s, like the head of carbon trading at Merril Lynch (big global firm).

I realised that, as a society doing business, we've gotten too reliant on powerpoint.

Then there was one of those 'holy crap I'm in London moments', where I looked up at the ornate, soaring ceiling and realised that I was in one of the leading schools for business thinking in the world, and that not only did I understand what was going on, but I had a bunch of questions I wanted to ask. So I did - skite!

If anyone's interested, the general arguments seemed to be that trading supposedly encourages businesses to be more innovative (although I've seen some companies come up with innovative ideas for getting out of paying the UK carbon tax, called the Climate Change Levy), while a tax gives business more certainty about the 'price' of carbon. However trading is bad because you can't trust businesses to do the right thing... and taxes are bad because you can't trust government to do the right thing.

In the words of one debater: "We can argue all we like about one or the other, at the end of the day we have to have something and in practical terms we'll probably have both".

At the end of it, the issue seemed to be less about what mechanism you use to raise funds/put a price on carbon and more on the fact that we have to do that somehow if we want people to recognise that emitting carbon is bad, and that the most important thing is that the money raised should be used (as it is in the UK) to help businesses and others embrace a low carbon economy.

I wrote an essay that reached broadly that conclusion during my masters - I confess I had a moment of smugness...