Gillard running out of options on carbon tax as attempts to sell it fail

WHO could have predicted that Julia Gillard would announce a climate change plan post election that makes the much maligned People's Assembly announced during the campaign look like the better option?

By breaking her election promise not to introduce a carbon tax during this term of government, without details of what the tax would include, Gillard has exposed Labor's left and right flanks, as well as its centre.

She has turned the People's Assembly into a good idea and businesses once in favour of the tax are being scared off by lack of details.

Had a people's assembly called for a carbon tax, it would have added a modicum of legitimacy to the idea, after which government advertising (I am not endorsing this septic practice) could have explained the details and even reminded voters why climate change action was important.

Gillard may not have got away with the backflip, but she would have stood a better chance than she does now. She underestimated Tony Abbott's ability to wreck her tax before she could explain it.

This Labor government has turned under-estimating Abbott into an art form. There is, of course, a long way to go between now and polling day, assuming the government runs it's full term.

Gillard will be hoping the relentless negativity of Abbott's anti-carbon tax campaign tires, especially if it passes into legislation and the economic impact proves negligible.

But in the meantime, Labor must sharpen its prosecution of the case in favour of a carbon tax. So far, it has tried three separate approaches to sell it: a cascading list of contradictory reasoning.

Plan A: Take the moral high ground. Yes, the carbon tax has an impact on price; it is supposed to, Labor tells us. That's how we save the planet. This was Labor's plan when it thought the debate wouldn't be as difficult as it has become, before it realised the significance of cost-of-living pressures the public faces. Not enough of the world's major emitters are pricing carbon, and not enough voters trust governments to manage such a scheme, especially this one. Plan A is therefore failing.

Plan B: Make it clear that consumers will be protected with compensation packages, and only the major emitting companies will pay. The problem with this argument is that when companies do pay they inevitably pass the cost on to consumers. The public isn't stupid, it understands this. And if a carbon tax is about altering the behaviour of consumers, how will that happen if we are compensated and don't feel any pain? The whole point of a carbon tax as a method of reducing emissions is that it puts a price pressure on us to do so. Throw in that there isn't a binding global agreement to trade carbon and emissions are just exported overseas to nations that don't price carbon, costing jobs and preventing the carbon tax from lowering global emissions. Plan B is flawed in its logic.

Plan C: Don't get bogged down in arguments about price or compensation particulars, speak in generalities. If Australia is in front and innovates we will become a world leader in the new low-carbon economy of the future. Maybe, but it's a hard argument to win and even harder to prove. The argument assumes other nations follow our lead, when in fact global action on climate change is in retreat, especially among the major emitters. The public has a right to be cynical about supporting a new tax reliant on an argument that is predicated on a hope that the next generation of Mark Zuckerbergs will choose Australia as their destination to develop the innovations of the future. Plan C is too hard an argument to win.

Sometimes it isn't as easy as A, B, C.

With its arguments in tatters and no details about what the tax will look like, the government has been reduced to stating over and over: "We will win this argument, we will win this argument . . ."

Labor can't retreat or advance. It is getting slaughtered by a barrage of carbon-tax arrows thrown by the opposition. Gillard is being tactically destroyed, her only hope being a strategic advantage in the longer term. But it is hard to see where it will come from. The only option appears to be to enact the tax and in time letting voters work out for themselves its pros and cons.