As the owner of a V8 Jag with pretty ordinary fuel economy, I’m personally happy that petrol is exempt from the carbon tax, but, as an economist, I can see that it’s bad policy and potentially inequitable. The carbon tax won’t apply to petrol, but it will apply to public transport because it applies to diesel (and hence buses) and electricity generation (and hence electric trains). Perversely, the carbon tax increases the price of public transport relative to car travel. In today’s Queensland Times, Rail Back on Track spokesman Robert Dow makes the frank and fearless observation that:
“A policy that promotes car use but penalises public and active transport is idiotic.”
It’s hard to disagree.
An informative piece on the illogical petrol exemption by University of Sydney Professor John Stanley is available here:
Public transport – collateral damage of our new carbon price
Queensland Economy Watch 
You had to throw in a line about the Jag. 😉
Good point on diesel vs. petrol. Along with victimising public transport, the tax will incentivise the purchase of less efficient petrol cars – just when Diesel was starting to make ground.