What’s the real cost of the carbon tax on Australia’s heavy polluters? Drew Fryer from MSCI shows that, with government compensation, some trade-exposed industries might actually come out ahead.

It is often argued that our major exporters will be hit hard by the carbon tax because they trade in a global market where other providers are not subject to the same tax. As you’ll hear, at its onset, the scheme will have no such impact.

By calculations from MSCI ESG research the biggest impact amongst trade-exposed industries will be felt by BlueScope Steel, but even then, they’ll only suffer a 2.4 percent drop in EBITDA. That includes an allowance for a 100 percent pass through in the increased cost of power.

So our heaviest polluting exporters will feel no hurt from the carbon tax. It puts credence to the argument made last week on BTalk by Dylan Byrne from BDO that it’s the rest of the business community that will feel the squeeze the most. It makes you wonder whether the compensation to our major exporters has been too generous.

First published on CBS News