Cap-and-Trade Backflip

Kevin Rudd realizes how much an emissions-trading scheme will cost Australia.

From today's Wall Street Journal Asia.

Kevin Rudd likes to talk about showing moral leadership for the world on climate change. But the better example for other governments to follow is the Australian Prime Minister's backtrack on a costly emissions trading scheme.
Mr. Rudd announced on Monday that he will delay implementation of his trademark cap-and-trade proposal until at least 2011. With luck, that will be after the clouds of a global economic slowdown have started to clear and -- more important for Mr. Rudd's Labor Party -- after the next parliamentary election.
The draft Mr. Rudd floated in March would have imposed total carbon permit costs (read: taxes) of 11.5 billion Australian dollars (US$8.5 billion) in the first two years, starting in 2010. This would have increased consumer prices by about 1.1% and shaved 0.1% off annual GDP growth until at least 2050, according to Australia's Treasury. All for negligible green gain, since Australia accounts for only 1.5% of global greenhouse gas emissions. No wonder it's been hard to win support from business groups and individuals who earlier professed enthusiasm for cap-and-trade.
The proposed delay is widely characterized as a "backflip" and has caused Mr. Rudd a lot of embarrassment this week. He may yet push ahead with legislation in some form -- as he certainly promised to do when running in the 2007 election. But it's becoming clear the proposal won't be a shoo-in, despite all the votes Mr. Rudd won when he campaigned on environmentalism.
This is yet another example for politicians elsewhere toying with cap-and-trade. Support for Australia's plan started fading as the costs became clear. The green left hopes no one will notice inconvenient details like money. But voters do.