Paul Kelly: An emissions blueprint for the world to follow

THE essence of John Howard's belated response to climate change is to commit early, think global and implement slowly.

After years of dispute and scepticism, Australia now has a strategic blueprint for action -- a blueprint superior to the defect-ridden European emission trading regime.

This is the start of Australia exerting serious influence on the global debate. In substantive terms, it closes the gulf between Howard and Kevin Rudd on climate change.

It insists that Australia must act now and not wait for global agreement. It makes the timetable for emission trading almost bipartisan -- Howard in 2011 and Labor by 2010.

While Howard's report does not specify a target -- in response to Rudd's 60 per cent cut by 2050 -- its entire "cap and trade" scheme depends upon a long-term target to be finalised next year after more analysis. Labor, equally, wants the scheme's design finalised "by the end of 2008".

This report, inspired by Treasury and the business community, opens a new era for Australia. It is the first federal government strategy to combat climate change.

It ends the debate between believers and sceptics. It starts a new debate between those favouring a market solution and those wanting government to pick energy winners. This is where the report will be extremely contentious.

The new battle that now opens is between the Treasury view that only a modest pace of adjustment is needed in the early years and the radicals who demand early and deep cuts in emissions by 2020. The report is utterly unforgiving on this tactic -- it depicts such early and deep cuts as a disaster for Australia's economy. While Rudd has avoided any 2020 targets, the rhetoric of his environment spokesman, Peter Garrett, has been different.

The report argues the big adjustments should come down the track after the technological innovation that enables such cuts with minimum harm to the economy.

Certain to become Howard's policy, the taskforce report rests upon three pillars -- a national strategy run by the federal Government requiring the states to abandon their own schemes; the view that Australia cannot wait upon a global regime; and a comprehensive market-based approach to trading that encompasses 75 per cent of total emissions, including fuel use in transport. This is far more comprehensive than the European model.

Australia's model is likely to appeal more to developing nations because of its exemption mechanisms for the trade-exposed sector where many companies now operate on world's best practice.

The report offers a sober appraisal of the realities. Climate change is a global problem. It cannot and will not be solved by Australia.

To this point debate on a post-2012 global framework has been "disappointingly slow". The current Kyoto arrangements are "inherently flawed". But Australia's creation of its own scheme gives it credibility in the emerging debate about the post-2012 system.