the untaxed sources, reducing our export volumes compared to the levels they would otherwise have attained. In short, unless there is credible, comprehensive action on a global scale, it is difficult to see why we would impose such a tax. There are a number of points commonly used to argue against that conclusion. I want to address six of them. Is Gillard's carbon tax worth the pain? AAP Is the world really acting? The first argument for the carbon tax is that the rest of the world is acting. True, voluntary commitments have been made, but it is uncertain those commitments will be implemented. For instance, while much has been said about China , there is no doubt the subsidies China uses which end up encouraging emissions far exceed any of its measures to reduce emissions. And there is little realistic prospect at this point of significant action by many of our major resource competitors. As a result, it is prudent to take account of the possibility that comprehensive, global agreement will not be reached and factor that into the decision. That makes it all the stranger to see advocates of the precautionary principle acting as risk-lovers when it comes to the carbon tax. Our action will not encourage others A second argument is if we act, this will encourage the rest of the world to follow. Experience suggests that is doubtful, all the more so as it is contrary to the logic of free-riding , frequently invoked both by