Kevin Rudd had a problem. One of the reasons he won office was his promise to reduce global warming by introducing a " cap and trade " system to reduce carbon dioxide emissions by industry. He successfully portrayed himself as leading this fight and castigated John Howard as lacking in interest.
Now he has a recession to deal with - and going ahead with that cap and trade regime would be economic suicide !
Rudd has walked away from his commitment by putting back the commencement date by a full year - moving it until after the next election !
He has softened it's impact by moving the carbon tax rate from $ 40 a ton down to $ 10 - and thrown in a whole heap of free carbon credits to industry - a move that will make the tax almost worthless as an incentive to install costly carbon reduction measures.
In a cynical act of politics he has offered an olive branch to the Greenies. The target remains at 5% reduction - but the upper limit has risen from 20% to 25% - on the proviso that the rest of the world jumps aboard. This is highly unlikely - given the present lack of enthusiasm - hence the offer is totally hollow !
Had there been no recession it is likely that a nominal reduction scheme may have got underway in Australia and some other countries, but world consensus was most unlikely.
We will probably have to learn to live with a hotter world temperature - and it's consequences - because a compact with other nations is simply not going to happen - and that new starting date will probably be moved again and again - to a far away starting point !
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