Productivity of labour is the key point
Tim: "For, as I say, all those jobs, all those revenues, are properly counted as a cost of such schemes, not a benefit."
You are making the same error as the pollies by looking at the wrong statistic. The key classical economic concept at work here is the productivity of labour.
Via international treaty the cost of the carbon pollution externality is going to be added into the cost of production. That will cause the productivity of carbon-emitting industries to fall. In turn the wages they offer will fall relative to the remainder of the economy.
Or, taking the positive spin that pollies like, non-carbon-emitting industries will have increased productivity, causing he wages that offer to labour to increase.
Anyway, the result is an incentive for labour to move from one industry to another. Labeling these as "new" jobs is a tad rich, almost as rich as infrastructure developments claiming "new" job creation for the builders of those projects.
Note that this isn't zero-sum basket-weaving: the increased productivity in the new sector increases the national wealth (as long as you're comfortable with the idea that atmospheric carbon decreases the national wealth).
The problem with this classical economics approach is two-fold.
Firstly, the time lag between price signal and action are long in capital-intensive industries, usually around a decade but that may be much longer at this moment (approach a bank and want to borrow $2B, you've no hope at all during the current banking sector crisis). The cost of that lagged signal is large, as the externality is increasingly increasing in cost. This market failure obviously requires some government intervention for the solution with least cost to the nation to be found -- government doesn't require a functioning capital market to make an investment.
The second problem is that the cost of the externality is artificial. No one knows what the proper cost is until the effects of the cost can be measured. That is, until it is to late for any reasonable market-based corrective action. This leads to a lot more problems than usual with pollution pricing schemes: carbon pricing is very vulnerable to a simple denial that a problem exists (no effected people can yet be shown). Then there are all the usual problems with pollution pricing: such as how to distribute the pollution price (using it as government revenue isn't wise) and the incentive for avoidance of this artificial cost -- either by moving operations to another regulatory place or by extra-legal avoidance.
Getting back to Tim's quote. What the pollies should be touting is the increased wealth of the nation from the transfer of jobs from the less productive to the more productive industries. You could even state that number in job-equivalent units. The problem with economics is that we can't tell them what this number will be -- the situation is too complex to do anything other than give numbers at the boundaries (and they are frighteningly enough, to be honest).
Biting the hand that feeds IT
