English original151 This chapter considers how markets for emission reductions can be built on the principlesconsidered in Chapter 14 The application of these principles requires careful analysis of t

sses and investors require a predictable and stable carbon price in order to make informed investment decisions. This means that policies must be designed in a way that creates confidence in the future existence of a robust carbon price. This can be achieved by providing long-term targets and regulatory frameworks that provide certainty and stability for businesses.

One way to achieve this is through the use of carbon taxes, which provide a clear and predictable carbon price. Another approach is through emissions trading schemes, which allow for flexibility in meeting emissions reduction targets and can create a market for emission reductions. However, these schemes must be designed carefully to ensure that they create a credible carbon price and are not subject to market manipulation or price volatility.

In addition to creating a predictable carbon price, policies must also consider the specific sectoral context. What works for one sector may not work for another, and policies must be tailored accordingly. For example, policies designed for the transportation sector may not be appropriate for the industrial sector.

Finally, it is important to recognize that carbon pricing is only one part of a strategy to tackle climate change. Other measures, such as supporting the development of technologies and promoting energy efficiency, are also necessary to achieve significant emissions reductions