CO2 - Carbon Fund units

[Snoopy]

If government policy moves entirely towards decreasing CO2 emissions, rather than mitigating their effect, what does that do to the CO2 unit price?

That's exactly the point of a cap on emissions. The cap sets the supply limit, demand sets the price, the price drives the emission reductions

First of all thanks for your answers. I have learned something. I do have a problem with that last answer though.

'Emissions reductions' occur when current energy use practices are realigned in such a way that carbon output is reduced. Carrying on as we are and trying to offset that by planting trees is not sustainable. Planting trees is a necessary short to medium term measure to capture some of that excess CO2 that already exists. I grant you that. But ultimately you can't 'carbon farm' your way out of climate change. It is the day to day operational processes that industry and consumers follow that must change for that.

Hence we have government schemes that subsidise the purchase of new electric cars, as an example. And other schemes that see the likes of some coal fired boilers replaced with electrically powered boilers. Those are the schemes that will actually reduce emissions for NZ on a sustainable basis. I see the government doing more of that, rather than persisting with carbon credits as an indirect incentive. Where to for the carbon market then?

SNOOPY