Bob Brown's tribute to John Howard

Can you spot the error in the following propositions? The Coalition will protect the economic interests of Aussie battlers. Labor doesn't trust the market to allocate resources. The Greens are too fixated on the environment to care about the economy.

The party names are in the wrong places!

The explosive politics of climate change, unleashed last Thursday by the Multi-Party Climate Change Committee's draft strategy on pricing carbon, is turning time-honoured political norms on their heads.

So it was Greens leader Bob Brown using John Howard's favourite term, "battlers", on the ABC's 730 Report last night, echoing comments he made during a Senate debate on a censure motion against the government.

Brown told the Senate: "Tony Abbott's prescription [for pricing carbon] is for a levy of no action at all except on the householders of Australia. What he is saying is, 'We will not charge the polluters.' He is saying that he has a plan for $3.2 billion to be levied on the taxpayers of Australia through consolidated revenue ...

"Tony Abbott is saying that rather than cost the polluters he will take the jobs, the wellbeing and the delivery of welfare to average Australians. I say to Tony Abbott that, if he moves to repeal a scheme this parliament has decided on in the interests of this nation … we will take him on as he featherbeds the polluters against average households, average small businesses and average Australians."

Brown is attempting to move the Greens closer to the middle ground on the economics of climate change. It looks likely that his party will try, via a compensation package for households hammered out with Labor and the independents, to position itself as protecting "battlers" against what he calls the "Polluters Party".

Logically, this position is flawed. The ETS proposed by the government (for it is an ETS, arrived at via a transitional tax) will impose costs on 'battlers' as energy providers, manufacturers and others pass on increased electricity costs to households.

The policy's saving grace, at least as far as the 'battlers' argument is concerned, is that Labor and the Greens are likely to return significant amounts of the revenue collected to lower-income households, the idea being that they will then spend it on less polluting products and services.

On the second proposition, it's now the Coalition that is being accused by Labor of "picking winners" and not trusting a market-based solution to carbon pollution abatement.

As former Environment Minister Malcolm Turnbull explained on the ABC's Q&A last night, the bulk of the Coalition's 'direct action' policy will be implemented through a government-run tender process. Big polluters will send their carbon-reduction plans to Canberra, and bureaucrats will compare apples and oranges before handing out giant dollops of tax revenue to fund the best schemes.

It's an uncomfortable fit for conservatives, which is presumably why Turnbull has been parading his free-market credentials in an interview with the BBC. The interview, posted on the BBC website but not viewable in Australia, contains the following quotes, according to Fairfax media: "There had been for quite a while bipartisanship, that Australia should cut its emissions, it should do so by what was seen ... as the most efficient way and that was by a market-based mechanism – an emissions trading scheme."

But the official Coalition line allows Julia Gillard to take the high-ground in terms of 'trusting the market' as she did yesterday in question time: "On this side of the parliament we stand for pricing carbon in the most efficient way. If you are pricing carbon in the most efficient way then you are putting a price on carbon through a market mechanism, through trading permits to release carbon pollution."

Of course, what Gillard doesn't say is that the three to five year process of transition to an ETS could easily get bogged down in tactical fights with the Greens, thereby pushing the market-based system into the distant future – and leaving Australia with a long-term carbon tax instead.

And so on to the third proposition. Is it Labor, rather than the Greens, placing environment above economic objectives? This is the crucial question, and the reason the MPCCC released such a vague plan, so early in Labor's second term of government.

Labor needs plenty of time before the next election to get business leaders on-side with the final form of the tax/ETS plan, and early signs are not good. Australian Industry Group CEO Heather Ridout told The Australian yesterday: "While [carbon pricing] certainty is important for decision-making around major long-term investments, this certainty should not come at the cost of a loss of competitiveness that sends jobs and emissions offshore or risks the continuity of energy supply."

Losing Ridout's qualified support for its plans would be a big blow to Labor. It is currently caught between a voting public that wants action on climate change, as long as it doesn't cost too much, and the Greens who want carbon cuts dramatically larger the Labor's plan to reduce emissions to 5 per cent below 2000 levels by 2020.

The more industry groups complain about the loss of jobs offshore, the harder Labor will find it to strike a deal on a carbon price with the Greens.

Climate Change Minister Greg Combet has indicated we should get something like the full form of the policy details within the next four or five months. In the meantime, with the major parties borrowing each other's policy clothes, the voting public should be forgiven for wondering which way is up, as they try to get a fix on the increasingly carbon-filled sky.