From an economics point-of-view creating a price signal is a well-established way for governments to correct a market failure.

What this means is that governments make the things they want to discourage more expensive and the behaviors they want to encourage relatively cheaper.

The market failure in this instance is that companies and individuals can pollute the atmosphere with carbon dioxide, other gasses and particulates from burning fossil fuels for free. The consequences of this affect all of us - go to the CSIRO website if you want details of how.

In this instance the government is doing two things, it is providing a price signal and modest compensation. So as consumers we can choose to continue with our current buying patterns and hope we won’t be worse off, or adapt our buying patterns by reducing our energy consumption for example, and potentially being slightly better off.

But the carbon tax is not just about carbon; it’s also about challenging the level of consumerism that, combined with world population growth, is eroding the stability and resilience of our environment. If it didn’t involve so much money for the biggest corporations on the planet I suspect we would have made much more progress than we have. As individuals we tend not to like change. As organisations we strongly resist it.

More than 97 per cent of scientists and hence most nations accept that it would be wise to limit carbon emissions. The question is, how do we fairly distribute the wealth that our carbon-built economy creates?

Well, one answer is to create wealth without using as much carbon. This is the elusive win-win for the environment and consumer capitalism that means humans get what they want; just not at the expense of other poor humans in far away countries or animals and plants that are rarely seen and whose significance is often misunderstood.

Here are some reasons why the carbon tax is a good thing:

The emotional reasons:

The vast bulk of the population is concerned about the environment (78 per cent in the most recent NSW poll). Many people just think we’ve been pushing too hard for too long. They have seen changes in their local environment which they don’t like and they are glad to see the government doing something about it with the support of scientists and economists.

The values and beliefs reasons:

Out of the 180-plus countries in the world, Australia consistently ranks in the top 20 for per capita income and quality of life. Of that 20, about 10 already have a price on carbon and the other 10 have become rich on either selling oil or manufacturing ‘stuff’. Perhaps it’s quite reasonable that the rich developed countries curb their consumption of non-renewable resources and leave some for other countries and future generations?

The logical reasons:

Endless growth is a nonsensical concept- it’s a measure of the increasing rate at which we are using up finite resources. Endless change is how the universe works. Which one do you think we should align ourselves with?

Even if you are not worried about putting extra CO2, mercury, nitrous oxides and other pollutants and cancer-causing hydrocarbon compounds just about everywhere into the atmosphere, consider that ABARE estimates we only have about 90 years of coal left at 2008 extraction rates. Surely the price is only rising for carbon-rich commodities. Shouldn’t we save some of this resource for future generations who may be able to use it in less polluting ways?

Consider also that there are proven, viable alternative sources of energy and materials that consume significantly less carbon. Renewable energy technology is already challenging the carbon-hungry model.

Once the purchase price of renewable energy generators is paid off (in a few years) for the rest of its life the plant provides essentially free energy!

Imagine the competitive advantage to Australian businesses in those few years when their energy costs are small compared to competitors relying on carbon-heavy energy.

A carbon tax provides the incentive for these business to reject the existing, inefficient energy supply, which is distorted by subsidies, has limited local control and pays profits to far-away shareholders.

It’s part of the search for new ways of doing business that account for environmental impacts and, in so doing, minimise them. This is why the countries that met at the Rio Earth Summit last week were searching for new ways to achieve sustainable development - one that accounts for all the things that contribute to our wellbeing. Having a price on carbon is an essential first step in this quest.