A “set and forget” policy stance will not be adequate to deal with the many uncertainties affecting the supply and demand for “carbon permits” in the future, according to the Institute of Actuaries of Australia.

In the first detailed response to the Federal Government’s Garnaut Climate Change Review by an insurance-associated body, the institute supports the creation of an independent authority to actively monitor and manage the permits scheme.

“The need for flexibility does not detract from the need for firm long-term and interim emissions targets for Australia, which should be applied as comprehensively as possible.

“The design of an Australian emissions trading scheme must allow sufficient scope to permit its operation to be actively managed, adjusted and refined into the future.”