Even though climate change effects and costs are uncertain, Australia has accepted that action is warranted in moving towards a global solution. In doing so the Australian government has chosen a range of 'no regrets' policy measures to reduce greenhouse gas (GHG) emissions to below its 2008-12 Kyoto target. However, a decrease in land clearing since 1990 rather than reductions in emissions from the energy, transport and industry sectors, is mainly responsible for Australia performing near to its target trend. In this article, it is argued that, in the future, the raft of inefficient taxpayer-burdensome greenhouse measures will need to be replaced by an economy-wide tax or a permit- trading scheme that would put a price on emissions. The result would be an economy less emission-intense, achieved at the lowest possible cost. At the same time ratification of the Kyoto protocol would enable the Australian government to eventually trade permits internationally and thus further reduce the costs of meeting future GHG targets.