al issue, the dynamic market and the governmental objective to limit emissions. The predicted impacts of the carbon tax will be examined in this report in relation to economic theories and assessment models. This report will further address the implications of the carbon tax for the tourism industry and its consumers in the short and long term.
             2.0. Predicted economic impacts of the carbon tax and methods for impacts assessment.
             The carbon tax as a climate change policy will exert extensive economic impacts on the market. The simplest manifestation is that the consumption of carbon-intensive products will decline and their price will rise. This phenomenon reflects one of the key functions of the tax which is "to raise price to discourage consumption of demerit goods or goods with harmful environmental impact" (Tribe, 2011, p.424). From this perspective, the carbon tax can be viewed as a form of market intervention to address the climate change issue by discouraging consumption of carbon-intensive goods through high price. On the other hand, the future economic impact of consumption decline and price rise can also be predicted based on the interrelationships of the supply and demand of goods and their relative market price. Businesses will reduce their output when the carbon tax payment and their abatement expenditure increase the marginal cost (Amin, 2009). This effect shifts the supply curve to the left and equilibrium price rises (Tribe, 2011). Consequently, as in their market price increases, the consumption of carbon-intensive products will decline (Tribe, 2011). For example, with the imposition of the carbon tax, tourism businesses dependent on aircraft will face fuel excise costs going up by more than 150 per cent, which will escalate the price for consumers (Felicia, 2011).
             Another future impact of the carbon tax is that the price of the substitutes for carbon-based resources will rise and the price of the com...