BOTH carbon price mechanisms and direct action should be used to combat the challenge of climate change, Climate Change Authority (CCA) chair Bernie Fraser says. "I think the challenge on climate change is such that you want every possible piece of equipment you can get in the toolbox to combat that challenge," he told a senate estimates hearing on Monday. We are not talking about price-based mechanisms and direct action as alternatives. I think a suite of all possible measures including regulatory measures in terms of efficiencies and legal standards, all those kinds of things need to be in the tool box. Mr Fraser said it was hard, for him, to imagine that some kind of price-based mechanism, domestically and internationally and trading in permits, would not be part of that toolbox alongside various forms of direct action. In its last report in October, the independent climate advisory body described Australia's 2020 carbon emissions reduction target of five per cent as "inadequate" and recommended a cut of at least 15 per cent. In its draft Targets and Progress Review report the CCA - soon to be abolished by the federal government - did not make a final recommendation on what the 2020 target should be, instead canvassing two options - a "minimum" 15 per cent reduction and a 25 per cent reduction. The CCA's head Anthea Harris told the senate hearing that the body's last report did not speculate about the impact of the coalition's direct action policy. But she said there might be more information available before their final report, due next February, is finalised that would allow them to arrive at some conclusions. Mr Fraser said Australia appeared to be "falling behind" on action to address climate change compared with other nations. He said it was a pity the government wanted to axe the independent body in favour of having "in house" advice on climate.