The most important task for global climate policy is to get First World countries to finance the developing world’s mitigation efforts. A crucial feature of Australia’s Clean Energy Future package is that it allows companies to purchase international "offsets" -- credits for reducing emissions overseas. Many environmentalists attack this, because we should cut our own pollution rather than pay foreigners to reduce theirs. However, perverse as it may sound, "sending Australian money offshore" is exactly the right strategy if we hope to avert dangerous warming.

To an economist, such internationalism is plain commonsense. Many environmentalists, trapped by reflexive nationalism, think otherwise. Fergus Green in Crikey characterises use of international offsets as a "travesty of policy making" precisely because this approach seeks to reduce emissions efficiently on a global basis.