Setting reduction targets to curb climate change ought to be in line with commercial considerations. The government should have the capacity to meet any given mitigation effort in the most flexible and cost-effective manner and to issue help to the worst hit section of the population including both households and firms.
Therefore, the Carbon Pollution Reduction Scheme is what economics term a cap and trade system, which connotes quid pro quo i.e. everybody wins; manufacturers receive incentives for reducing greenhouse emissions while at the same time safeguarding the environment.
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