BUSINESS has put the Rudd Goverment on notice: it needs to revise its emissions trading strategy to avert a crisis for corporate balance sheets and the nation's economic health. Climate change, the dream political issue for Kevin Rudd at the 2007 election, has been transformed into a political and policy nightmare.
Make no mistake, the Rudd Government is now trapped by its pledge to proceed with an emissions trading scheme by 2010, before most of the rest of the world and, in particular, ahead of most of our trading partners. It faces a dilemma with no escape: it must either alienate the green lobby and climate-change believers to whom it has pandered, or proceed without sufficient support from corporate Australia in the teeth of warnings about corporate financial risk.
The second option is unthinkable. The entire point of emissions trading is not to combat greenhouse gases, it is to establish a reduction trajectory at minimum harm to Australia's economy and competitiveness.
Read more of Paul Kelly's* column here.
*Editor of The Australian.