2017 Worldwide CO2 Emissions - variwide chart (IEA ed. If we have a carbon tax, the rate must be high enough to achieve a significant reduction in emissions. The National Greenhouse Gas Inventory reports the greenhouse gas emissions released as a result of human activity in Australia every year.The government uses the inventory to track progress towards emission reduction targets under the Paris Agreement and other international climate change treaties. And this would be passed through to the consumer.Under an emissions trading scheme (also known as cap-and-trade), a cap (the total level of national emissions) is set by the government and companies purchase abatement permits. If the cap is set at the right level, the market should successfully determine the price.This method determines the amount of emissions to be reduced and punishes companies that do not reach their reduction targets with a penalty payment. In the year to March 2019 emissions per capita, and the emissions intensity of the economy are at their lowest levels in 29 years. If a company is able to produce cleaner electricity – for whatever reason, even so-called clean coal - and reduce their emissions, then they will not need so many permits and will be able to sell surplus permits to other generators at a price determined by the market.While it is difficult to get a carbon tax rate right, this is not an issue for emission trading schemes because the price is essentially set by a market and drives companies to reduce their emissions at the lowest possible cost. The following table lists the 1990, 2005 and 2017 annual CO 2 emissions estimates … The overwhelming majority of electricity is still produced by the burning of fossil fuels, such as coal. If it’s set too high it could drive companies into financial stress, damage the economy and reduce GDP (Gross Domestic Product).One could argue that if India, China and the US do not participate, there is no point in Australia doing anything but I believe a country that can afford to reduce emissions, like Australia, has a moral duty to act.In Australia, the average emission intensity rate at the moment is roughly 0.8 tonnes of carbon dioxide per megawatt-hour electricity produced. Australia’s conservative government in 2014 dismantled a carbon trading mechanism that put a price on emissions. This report provides estimates of Australia’s greenhouse gas emissions up to the September quarter 2019. I think it is very important no other country can say they don’t have to contribute because Australia didn’t do anything either.China has determined that it will have an emission trading scheme and the US will eventually have a change in government and stronger environmental regulations. A carbon price is a cost applied to carbon pollution with the goal of addressing climate change by reducing the greenhouse gas emissions generated in the production of electricity. In March this year, Deputy Governor Guy Debelle said financial stability was "better served by an orderly transition to Essentially, pricing carbon comes down to a carbon tax versus an emission trading scheme.A carbon tax will raise energy prices but does not necessarily ensure emissions will be reduced to the necessary level. Both systems will increase electricity prices - the carbon tax at a defined rate and the emissions trading scheme at a more flexible rate that will probably encourage more technological innovation.Either way, it is important the relevant rates are set correctly.