Isra-Mart srl: Tony Abbott makes a habit of flipping

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TONY Abbott the republican? Or just the cynical manipulator who grasps only at that which furthers his own political ambition - inconvenient truth, principle and intellectual rigour be damned along the way?

It has to be one of the two following Abbott's reaction to news over the weekend that Conservative British Prime Minister David Cameron penned a letter to Julia Gillard praising her Government for its action on climate change.

Australia's carbon tax package, according to Cameron, sends a "strong and clear signal that Australia is determined to make its contribution to address this challenge".

Labor immediately leapt on the letter, citing it - and the fact that Britain has already moved to introduce its own carbon price regime - as proof that Abbott is "out of step with just about everyone around the world" on climate change.

This may not come as a surprise, but Abbott's immediate response to this repudiation of his scare campaign was a big "no". In fact, he labelled Labor's gleeful receipt of the Tory missive from the Old Dart as "cultural cringe to the old country" - hardly the words of the staunch monarchist he has previously claimed to be.

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Perhaps prolonged exposure to that well-known republican and former Liberal leader Malcolm Turnbull, who's position on the climate change issue has consistently demonstrated him to be a politician of personal principle and conviction, has swayed Abbott's thinking here?

Or perhaps not.

Remember Abbott's blunt dismissal of economists who vocally backed Labor's market-based mechanism to address carbon pollution over the Coalition's "direct action" plan?

"It may well be," Abbott said, "that most Australian economists think that the carbon tax or emissions trading scheme is the way to go. Maybe that's a comment on the quality of our economists."

Apparently the only quality economists are those employed by rent-seeking industry groups proffering dire predictions of economic armageddon unless they are dealt special treatment.

Mind you, consistency is not Abbott's strong suit.

This is, after all, the man who initially dismissed climate change as "crap". Then, when former prime minister John Howard acknowledged the need for action on climate change and took an emissions trading scheme to the 2007 election, Abbott advocated a carbon tax.

Now the very tax Abbott argued in favour of when it suited him is allegedly going to visit devastation upon the land.

This is the same Tony Abbott who warns of economic plague and pestilence in Victoria's Latrobe Valley as brown coal power stations are shut down and who intends to use taxpayers' money to take direct action against those very same emitters.

This is the Tony Abbott who in 2009 said: "We don't want to play games with the planet so we are taking this issue seriously and we would like to see an ETS."

In essence, Abbott is trying to appeal to the sceptics with a plan that in effect amounts to virtually "no action".

In fact, there is considerable irony here. On Sunday, about 1500 anti-carbon tax protesters gathered in Sydney with the usual "ditch the witch" insults and banners denouncing socialism and claiming the carbon tax is a communist conspiracy.

Socialism is not normally associated with market-based mechanisms like Labor's scheme. Rather, it is to be found in government intervention, using public money to pick winners and reshape industry through direct investment and incentives. Guess which category Abbott's "direct action" plan falls into?

Rather than being dismissed, Cameron's letter to Gillard should serve as a wake-up call that climate change abatement measures are as much a matter of economics as they are about the environment.

Paul Simshauser, the chief economist at AGL Energy, encapsulated this very well at an American Chamber of Commerce function in Brisbane late last week.