Julia Gillard has secured a politically marketable scheme to price carbon that is aimed at inoculating her embattled Government from a householder backlash while achieving credible tax reform.
By adopting a soft start in which no one pays any more tax and most households will not be any worse off under the higher cost of living, the Prime Minister claims it is a very "Labor" approach to reducing emissions.
In reality, it's got many of the design features you could imagine John Howard and Peter Costello would have come up with if given a chance after the 2007 election to craft an emissions trading scheme.
The politics of big economic changes demands the people aren't scared out of their wits by what it means to them, more so when you are an embattled Prime Minister with low personal approval in a minority government.
That's why this package looks more like an income and pensions plan than an environmental one, as shown in what the Greens surrendered.
The Greens wanted a carbon starting price of more than $40 a tonne. It's $23. They wanted a 2020 emissions reduction target of 25 to 40 per cent on 2000 levels. It's 5 per cent. They wanted fuel included. Fuel was excluded.
In return, the Greens got a $10 billion clean energy fund and the 2050 emissions reduction target lifted to 80 per cent, up from 60 per cent under Kevin Rudd's abandoned carbon pollution reduction scheme.
But while filling the pockets of consumers may help the Government's battle for the hearts and minds of households - even though a third will, by its own admission, be worse off - it will have a far harder task winning over businesses that worry about Australia's competitiveness.
The $23 starting price is well above the international price and the inability of emissions intensive, trade exposed industries to seek cheaper abatement costs during the three-year fixed price period will inevitably cause alarm.
And while the Government has already won the parliamentary battle for its carbon plan through the multi-party climate change committee, the political battle is far from over.
Opposition Leader Tony Abbott made it clear yesterday that his campaign against the carbon tax will only increase in coming months.
He will continue to dismiss credible criticism of his own direct action plan with absolutist statements.
He will concentrate his attack on examples where compensation will not be enough to offset the rising cost of living.
And he will continue to demand voters get the opportunity to rule on Ms Gillard's broken promise not to introduce a carbon tax.
Though the carbon plan is guaranteed in a legislative sense, the future of Ms Gillard and the Government is not.Ms Gillard's very survival depends on her ability to sell a complex reform with a calm assuredness that her Government has so often lacked.
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