2/7  BIS central bankers' speeches  Properly aligned incentives can reduce the need for pervasive regulation. Of course, regulation has its place as a complement to pricing.
But given how energy is used in a modern economy, and the magnitude of the changes required, regulation alone cannot possibly do as comprehensive and consistent a job of changing the behaviours and activities that generate greenhouse gases. Of course, carbon pricing has economic consequences: most directly, it is costly for households and businesses to transition to a smaller carbon footprint.