I have looked up the Liberal policy on carbon dioxide reduction. It is not a tax on everyone. It is market based (purchasing the cheapest 10%). Naturally, it would cost a tenth of the Government's scheme which is a tax on every tonne.
The third option is what the Coalition has called direct action, but what is more technically known as abatement purchasing. This primarily rests on incentives, not penalties. Rather than taxing all 10 tonnes of a firm's emissions simply to get them down to 9 tonnes, the government will directly buy back just 1 tonne from a firm. But it will do it through a market to find the lowest cost reductions.
So instead of having to raise $4.5bn in taxes across the entire economy to dampen emissions by 13 million tonnes (again Treasury's exact figures), the Coalition would target the cheapest 13 million tonnes of emissions reduction available in the country and buy them directly. We have allowed $300 million, for example, but the total cost would probably be $200m.
The government has tried to argue that abatement purchasing is somehow not a market. It is and it has a strong intellectual heritage in Australia and overseas.
In Australia, it is exactly how the ALP government buys back water licences by tendering for the lowest cost water from willing sellers. It is very close to how the NSW greenhouse gas abatement system operates and it is what Premier John Brumby is proposing in Victoria with a rumoured start date of October.
Abatement purchasing is also the heart of the UN's Clean Development Mechanism, but you won't hear that from the government.
http://www.liberal.org.au/Latest-News/Blog/2010/09/27/Cutting-Carbon--A-Third-Wa...