Isra-Mart srl : 'B team' left holding the carbon tax

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Given Labor's inability to sell the success story its macroeconomic management during the GFC, it's hardly surprising that it's making a dogs breakfast of the carbon tax.

The ineptitude is so blatant, one might almost wonder if the government is serious about pricing carbon at all.

In a reasonably rational world, getting a carbon tax off the ground shouldn't be the impossibility the government seems determined to make it. The performance so far only makes sense if it's an attempt to ensure the independents in the lower house vote against it.

For a start, carriage of the carbon tax proposal has been left to the Department of Climate Change – not an organisation to inspire confidence. Replacing Penny Wong with Greg Combet as the relevant minister doesn't actually change the climate or the department's credibility – this is still the same mob that couldn't administer the installation of pink batts and came up with the fuzzy and failed green loans scheme, among other things.

Displaying either a particularly dry sense of humour or simple perversity, the department is now asking interested stakeholders and anyone else who cares to make written submissions “on the proposed architecture and implementation arrangements for a carbon pricing mechanism”. The main problem with that is that no-one knows what the proposed architecture and implementation arrangements might be, making it rather difficult to offer a submission that means much.

When businesses that are approaching carbon pricing positively are having trouble getting anything of substance from the government, it's no wonder those whose existence is being threatened by bureaucrats are cutting up rough and that those who had done a CPRS deal are now backtracking.

No benefit of doubt

Given the experience of the mining industry feeling it had been ambushed by the first attempt at a resources rent tax, and then its success in forcing a massive back down, there's no reason for business to give the government the benefit of any doubt

Meanwhile the opposition can't believe its good fortune in being gifted Julia Gillard's specific broken promise, let alone the bonus of a government that itself doesn't know what its scary “big new tax” really is, when there's not a clear-cut answer to the question of carbon leakage (when the pollution moves offshore but still ends up in the atmosphere via some foreign smokestack).

Part of the supposed appeal of a carbon tax is that it should be a much simpler mechanism than carbon trading. If that's the case, we should be grateful the CPRS was scrapped. If you were serious about getting such a tax off the ground, it would make sense to start simply.

For example, you could just make it a border tax, like the GST – you don't pay it on exports while imports have it added on.

Voila, the steel, cement and aluminium companies and their union employees are off your back. The independents could vote for it and something would actually be implemented. The department has neither the wit nor talent to be able to finesse complicated compensation formulas for this blast furnace or that kiln.

Then you find a Treasurer and/or Prime Minister who can sell an economic reform so there's no need to be excessive in compensating voters for the message the price mechanism is meant to deliver.

The carbon ball could start rolling with no more pain than that being imposed by recent electricity price hikes which, with the exception of the odd dodgy election promise, are being imposed without any suggestion of compensation.

The point of Australia pricing carbon isn't to save the planet tomorrow, but to begin preparing our industry for the time when it has to comply with international carbon restrictions and to make renewable energy viable.

It's better to make small steps in that direction than none at all – as the Greens might have learned after blowing the chance when Rudd and Turnbull were running the show.

With China each year building coal-fired power stations equivalent to Australia's entire electricity generating capacity, cogent international restrictions aren't going to be thrust on us tomorrow.

Should the possible climate crisis become more apparent though, when much of the rest of the developed world is already further down the carbon reduction path, you'd be mugs not to have at least made a start.