Almost every economist agrees that the most effective, efficient, cheapest, flexible and fair way to make a significant dent in CO2 emissions is to put a price on carbon – tax or emissions trading. schemes. The theory sounds good: fossil fuels are cheap because the externalities (the costs of the social and environmental damage they cause) are not included in the price consumers pay for the fuel. In addition, there are subsidies that many governments pay to the fossil fuel industry.

Following economic logic, if you make the fossil fuel industries pay for the social and environmental damage caused by emissions, it will encourage them to reduce their emissions to keep the price low and remain competitive with each other and with renewables.

On the other hand, almost every politician agrees that legislating to implement a carbon pricing system is difficult – Australia, of course, is the only country to date to have legislated to remove a carbon pricing system. (Peter Sainsbury, more at johnmenadue.com)