There are those like peterc005 who will happily pay his tax and exhibit no change in his emissions behaviour (essentially nullifying the point of having a tax to alter people's emissions behaviour), while others will get compensated to make them feel that they are not out of pocket for the tax either (at least for this year, and also essentially nullifying the point of having a tax to alter people's emissions behaviour). So with everyone maintaining their behaviour while the tax man goes around with his hand out makes no sense at all to me. I'm sure the net effect on our 1.5% contribution to global man-made CO2 will be even less, and the net effect on a global scale will not even register. Meanwhile, back on planet weird, everything now costs more for no good reason because no one is capable of stopping the ALP/Greens policy freight train.
I think this assumes that the principal behavior the tax is designed to change is all at the consumer level. I am not sure that's 100% correct. While there is certainly a consumer level behavior change (people worried about, say,. power bills) it's actually most effective higher up the production chain. That's why the flow-on effects are compensated at the consumer level for the majority of consumers.
The idea is that industry, in an effort to reduce costs, will take steps to lower emissions. Not necessarily today, but at a point. So if they are investing in a new machine to make their widgets, and there is a more environmentally friendly (but possibly more expensive in terms of purchase price) option, there is now a longer term incentive to buy the environmentally friendly option.
Your last point, that "now everything costs more". I've seen no evidence of this. In fact, I've seen no evidence of anything going up with the exception of power. Power accounts for from memory about 2.1% of household expenditure (Beer: 2.2%. Smokes 2.3%. Takeaway Food 5.4%), so any increase a small base of 2.1% and mostly compensated.
I know power is going up by more than that, but it isn't the Carbon Tax. It's mostly years of underinvestment by State Governments catching up with them, but that's another story.
In terms of aviation, there will be very little effect as far as I can tell. A small fuel increase but far less than normal fluctuations in price.
Love it or hate it, think it's useless and pointless or a great idea, but we should have an honest debate. Not just say we'll all be rooned. We were all gong to be paupers with the floating of the dollar, with the GST, and with just about everything else. And we seem to be doing OK.