Richard Denniss, the executive director at The Australia Institute, believes we do need to put a price on carbon as a means of changing consumptive behaviour, but he doubts a simple emissions trading scheme is the way to go about it.
Why? Simply because there’s no incentive to go beyond the targets set by the government.
As he explains in this edition of BTalk, if an individual, company or government, manages to cut their carbon emissions, under a trading scheme they enable a polluter to undo their good work. Certainly the government can control the total emitted through the issuance of carbon credits, but because of the nature of trading we will also never go below the level set by the government.
That’s why, says Denniss, we need to seriously consider a cap and slice approach. There are many ways this can be achieved, but the first step is agreeing that this needs to be built into the model. Unfortunately most public debate is consumed with why we should have a scheme in the first place, so there’s no space left to discuss how it might work in practice.