The government has been clear that it plans to rely on the Emissions Trading Scheme to meet climate targets.
But according to the Climate Change Commission, the scheme will not be sufficient in its current form.
In advice to government released yesterday, they say there is an over-supply of units.
This means that large polluters - which buy the units to allow the release of planet-heating gases - often find it is cheaper to buy them than invest in ways to cut pollution.
The Commision's chair, Dr Rod Carr, spoke to Morning Report.
