The ETS is the wrong tool for the job. Its far too complicated and opaque for its own good.
A better approach (as originally proposed by Prof. James Hansen) would be to incentivise all economic actors (businesses and individuals) to make everyday decisions that directly lead to reductions in GHG emissions. This can be achieved via a carbon tax and dividend which will apply a price on GHG emissions which is clearly signalled & incremented annually in order to meet 2030/2050 Paris targets. The dividend (tax revenue) is then equally returned directly to all economic participants as a UBI and/or tax credit. This ensures aggregate demand is maintained whilst positively manoeuvring the economy towards lower GHG outcomes.
Additionally we wont waste any more time trying to pick the best reduction technologies/processes and then waiting for the corresponding policy development. A lot of vested interests are currently benefiting from our inaction and also publicising when policy has not delivered the desired reductions.
Canada and others have already implemented Tax and Dividend & similar schemes. As more countries see the benefits of T&D and implement it - it could become a pre-requisite for global trade.
!! NZ lets not get left behind supporting an emissions trading system that has spent the best part of 12 years hiding away from our daily spending decisions. We need a system that is transparent, stimulates demand (for current COVID and future shocks) is present in decision making over the entire economy and most of all effective.
I am open to any further discourse or critique from any of the panel or forum members - please reach out to me on Linkedin!
Thanks for starting the discussion and providing the platform VisionWeek!