Wikimedia Commons

OECD backs carbon tax as blueprint to fight climate change

THE OECD has backed Labor's carbon tax as the cornerstone of actions to reduce climate change the world over, raising questions about the Coalition's Direct Action Plan.

A report by the group of developed nations found a global system of carbon prices was needed if the world hoped to limit climate change to 2C increase from industrial levels.

OECD Secretary-General Angel Gurria said whatever policy mix was put in place; it had to lead to the "complete elimination of emissions" in the second half of this century.

"We don't need to see zero net emissions tomorrow, but we will need to be on the pathway," he said.

Mr Gurria also questioned approaches based on incentives, like the Abbott Government's Direct Action Plan, saying cherry-picking easy policies was not enough.

"There has to be progress on every front, but notably with respect to carbon pricing, and we don't have any time to waste," he said.

"Unlike the financial crisis, we do not have a 'climate bailout' option up our sleeves."

The Federal Government is reading its Direct Action Plan to roll-out as soon as it repeals the carbon tax, expected to take effect from July 1 next year.