Australia is about to be hit by a carbon tax, whether the PM likes it or not. But the proceeds will go overseas

Ten years ago, in the lead-up to Australia's short-lived carbon price (or "carbon tax" - either description is valid), the deepest fear on the part of businesses was that they would lose out to untaxed firms overseas.

Instead of buying Australian carbon-taxed products, Australian and export customers would buy untaxed (possibly dirtier) products from somewhere else.

It would give late-movers (countries that hadn't yet adopted a carbon tax) a "free kick" in industries ranging from coal, steel and aluminium to liquefied natural gas and cement, from wine to meat and dairy products and even copy paper.

It's why the Gillard government handed out free permits to so-called "trade-exposed" industries, so they wouldn't face unfair competition.

As a Band-Aid, it sort of worked. The firms with the most to lose were bought off.