Warwick McKibbin makes a number of important points in his contribution. First, given that we have taken no effective action for a decade, the Task Group timeline for setting up an emissions-trading system by 2012 is excessively relaxed. Second, any credible strategy will require deeper cuts in emissions than those currently being considered. Unsurprisingly in view of his previous contributions to the debate (McKibbin and Wilcoxen 1997, 2002) , McKibbin welcomes the Task Group proposal for a

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... fety valve' in the form of a cap on the price of emissions. This proposal raises two kinds of questions.