Carbon Pricing
The 'polluter pays' principle
Key information
There is a general consensus that carbon pricing is a key strategy that will help lead us to a fully decarbonised economy.
It works by putting a price on carbon emissions, companies have a large financial incentive to reduce their emissions.
How it works
The two most common carbon pricing policies are:
Emission Trading System (ETS) - Companies have emissions units which are tradable, if a company emits less than their units, they can sell the remaining and benefit financially.
Carbon Tax - Directly sets a price on carbon by setting a specific tax rate on greenhouse gas emissions.
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