Why the carbon price must have a floor price

by Tony Wood

By Tony Wood, Frank Jotzo, Erwin Jackson, and Cameron Hepburn

The government, the Greens and independents agreed to keep the carbon price at or above $15 from 2015 to 2018 to provide some degree of confidence for industry to make low-carbon investments. This is the right decision. Preventing the carbon price from falling below a set level will encourage investment and ensure that the carbon market begins to reduce emissions.