The predictability part is really important both when trying to reduce the cost of climate change policies as well as when trying to get business to invest in emissions reductions.
Rapid, unexpected changes in economic environment tend to leave companies on dry land with a suddenly unsustainable business model. This is what happened during the oil crisis of the 1970s, or more recently during the financial crisis of 2008. Businessmen also hate insecurity about prospects and will tend to stop investing if they are unsure about what the future will bring, something that will slow any economy. When trying to get businesses to invest in emissions reductions it is important to create as much certainty as possible about what the emissions costs will be. After all – investing in new technology is risky enough to begin with without having to worry about losing out even if you succeed!
Clearly agreed, slowly growing, globally binding and uniform carbon taxes would be highly predictable and would make it much easier to invest in emissions cuts.