Showdown looms on climate

AUSTRALIA'S energy policy debate is about to erupt. The emissions trading system pledged by Kevin Rudd looms as a policy nightmare that means higher energy and transport prices.

And now an old demon has re-emerged, with demands Australia should go nuclear.

No, this isn't John Howard. It is the pro-green Bob Carr and the youthful Paul Howes, who runs the Australian Workers Union. And they are far more strident about the need for nuclear power than Howard was before last year's election.

Howes and Carr spoke to this newspaper with passion and urgency. While few people champion the nuclear option, this obscures the real point - mounting alarm from the unions, business and politicians about the design and consequences of an emissions trading scheme.

The corridors of the Australian American Leadership Dialogue were infected this week with multiple sources of this alarm. The unease is profound. It is as though Australia is sleepwalking into the biggest restructuring of its economy for a generation, with a popular culture that thinks climate change solutions are about light bulbs and carbon-free concerts.

The community is utterly unprepared for the harsh application of climate change mitigation - if the Rudd Government has the will to impose it. The question is whether a political constituency can be mobilised for a rigorous emissions trading system that will make Australia, outside Europe, one of the few nations to enter such carbon pricing arrangements.

The dialogue saw an intense debate that finished with few answers.

The fears are contradictory and confusing - that Australian industry and jobs will be the losers, that any Australian action will be environmentally insignificant as China's economy advances undeterred, that nuclear power must be assessed as a commercial option and not banned, and that a carbon tax may be a better approach.

Julia Gillard and Martin Ferguson heard the warnings. The Rudd Government faces an epic first-term showdown on climate change policy.