Given that we want investment to reduce greenhouse gas concentrations in the atmosphere there are two general approaches.

One is to penalise or charge extra to people who pollute and the second is to reduce the cost of investing in ways to reduce the level of ghg in the atmosphere. As the article points out the first method is going to cost us a lot and is unlikely to happen.

The second is the simplest and least costly (where cost is the total cost including lost opportunity cost of investing) in fact it can be shown it will cost us less for energy over the next ten years if we move to renewables.

So to reduce ghg concentrations we can "subsidise" investments rather than charging more to pollute.

If we subsidise investments we know that the "learning effect" comes into play. As we double the capacity of any technology we know that we learn how to use it better and this knowledge does not go away and compounds. This means - for example - that within half a dozen doubling of capacity of generating energy using solar arrays the cost of energy from this source will be less than cost of energy from burning fossil fuel.

This means we get compounding on our side whereas a simple penalty for polluting remains linear in effect.

Increase investment (even if it is a lot more expensive initially) and we will soon see ghg levels drop.

My calculations are $30 billion invested per year for 10 years to give Australia zero net emissions by 2020. This will result in electricity at at least half the current wholesale cost meaning that by 2020 we will be much better off than we are now. As we need fiscal stimulus packages to get our economy moving again $30 billion invested in ways to reduce ghg concentrations seems a sensible thing to do rather than waste time on less effective permits schemes. So instead of giving billions to people to spend give people money to invest in ways to reduce ghg concentrations.

YES! YES! go Col! Socialism by Stealth. I love it. Made my day!