A predictable and flexible carbon price?
Policy makers need a level of freedom when responding to climate change, to be able to adjust to new knowledge about the problem. At the same time, they need predictability to be able to drive long-term investments in emission reduction. The Government’s proposed carbon pricing mechanism recognises and balances these competing needs. It sets in place a stable framework that allows the likely consequences of policy to be calculated, but also leaves room for innovation and creativity.