Earlier this week Australian Prime Minister Kevin Rudd announced that the interim 2020 carbon emission reduction target for the Australian governments Carbon Pollution Reduction Scheme would be 5%. …but his government would consider up to 15% if the rest of the world was committed.

The night before I made a bet with my wife that the target would be 10%, not the minimum of 25% that most environmentalists wanted and that most climate scientists reckon is needed to stabilize atmospheric CO2 concentrations below 550ppm.

I underestimated the power of the fear factor. They went for 5%. Was it fear or the political expediency of getting legislation through the complex Australian political system? I heard a comment that said if the decision had been for a tougher  target than 5% the senate would block passage of any bill. I reckon we can always find an excuse for leadership failure.

What we get instead is fence sitting and a very sore behind. 5% is a decision – if you can call it a decision – which is as close to business as usual as possible.

And the excuse seems to be: I will if you will, otherwise I won’t.

The trouble is that somebody has to otherwise the market mechanism for emission reductions triggered by cap and trade simply won’t deliver because the price of carbon will be too low to shift investor behaviour away from carbon intensive business activity.

Mark