chapter  1
45 Pages


This chapter explores the distributional minefield of 'who pays' which, as already noted, is the real driving force that determines what can and cannot be delivered and explores how to chart a path through it. The second paradox is that many sectors seem to have the potential to profit from carbon cap and trade systems and most industry has opposed them. As emphasised at the start of, global energy and environmental problems are ultimately driven by consumption particularly for richer consumers. What it does mean is that carbon pricing needs to be embedded in domestic economic and political circumstances, the challenges of 'carbon leakage' need to be addressed as an enduring, not transitory, problem and the potential multiple national benefits associated with carbon prices and revenues needs full attention. The old adage that 'all politics is local' acts with vengeance: the challenge is to deal with it without losing the incentive to switch to lower-carbon inputs, production processes and products.