Green paper.

The government has released a " Green Paper " purporting to indicate it's intentions on the proposed emission trading regime.

A green paper is more of a "kite flying " exercise to gauge public reaction. What actually becomes law can take a very different form, depending on that reaction.

This is a clever submission. For the " Greenie " element it will be too little, too late. For industry it will be a well measured balance of action and exemptions designed to achieve some Co2 reductions - but not to wreck the economy. For the average person it will mean a jump in utility prices - with the promise of some form of yet unstated compensation.

Petrol will remain price neutral - until 2013. Emission costs will be offset by the government reducing excise on petrol for the initial three year period.

Electricity will jump by sixteen percent, gas by nine percent - and yet the cost of living is only expected to rise by slightly less than one percent. Perhaps the economists making that prediction were whistling in the wind.

The burden will fall heavily on coal fired electricity generation - the industry the state government is desperate to quit at any cost - but it was also given a straw of hope. The government is offering heavy compensation where sequestration locks Co2 safely away underground.

Export industries get protection. Aluminium smelters which export their product will get free permits to cover ninety percent of their pollution.

The timber industry is virtually exempt, protecting the flow of wood chips to Japan - but as a sweetener those that actually plant trees will be given tradeable credits.

Farmers will be exempt - until 2015.

There is no such thing as a perfect emission control plan, but at least this goes a long way towards achieving some sort of balance.

The kite is now flying - and in the days and weeks ahead we will see some very predictable flak trying to bring it down. Australia's continuing prosperity - and the living standards of the twenty-one million Australians will depend on positive thinking and resolve being maintained !