Decision that shattered faith in PM
It was the decision that seemed to snap voters' faith in Kevin Rudd. Perhaps a final straw. Straight after the government announced it was deferring an emissions trading scheme until 2013, graphs of the Prime Minister's satisfaction rating looked like a rock falling off a cliff. Labor's primary vote tumbled after it.
Labor is under attack from the Coalition for still being committed to the ETS in theory, and from the Greens for being too scared to implement it in practice. For Rudd, who said global warming was the greatest moral challenge of our time, the assault is of a far more dangerous kind - aimed directly at his personal credibility.
How could the government have taken such a disastrous decision? After piecing together months of ferocious debate within the ALP, the extraordinary answer seems to be that the decision was taken almost by attrition.
During the first three months of this year, what to do about the ETS was one of the hottest topics within the government. For a short while a double dissolution election remained an option. But the chaos of Copenhagen, the so-called ''climategate'' scandals and the Coalition's ''great big new tax'' scare campaign meant that all the arguments in favour of an ETS were quickly fading in the public mind and the undecided government was doing nothing to revive them.
At the same time, the NSW Right - in particular Senator Mark Arbib and Labor's national secretary, Karl Bitar - began arguing that after what was then five interest rate rises in a row, Labor was deeply vulnerable to the Coalition's campaign. According to senior Labor sources, the pair began to lobby the Prime Minister not just to delay the carbon pollution reduction scheme but to kill it altogether.
(Some in federal Labor believe the NSW government deliberately played up ETS-related electricity price rises in an announcement in late March to try to bolster the kill the ETS campaign.)
The ''kill'' option was ferociously resisted by Climate Change Minister Penny Wong, her assistant minister, Greg Combet, Finance Minister Lindsay Tanner and others on the grounds that it was bad policy and even worse politics, given everything the government had said it stood for.
The Prime Minister was undecided, torn, fearful of the political scare campaign over prices but just as fearful about what a lengthy delay would mean for his own credentials as a reformer and for the policy he truly believed was both necessary and right.
By the third week in April, other issues were forcing the kitchen cabinet - the strategic priorities and budget committee - to make a decision.
Treasurer Wayne Swan argued that since a delay was inevitable the government had to be clear about it, because it had big ramifications for the budget.
Maintaining a vague commitment to the scheme would complicate the politics of the resources super profits tax the government had recently decided to advocate as its major taxation reform. Why jeopardise a reform the government could deliver in deference to one that it had not been able to get though the Senate, Swan is said to have argued.
Even worse, from Swan's point of view, the way the compensation payments under the scheme are treated in the budget would make it almost impossible for the government to meet its crucial stimulus package ''exit strategy'' - to keep the growth in government spending below 2 per cent.
Even from the graveyard of Senate defeat, the scheme was threatening the government's self-imposed benchmark for economic responsibility. And because the spending would not be in the Coalition's figuring, it would mean Tony Abbott's spending calculations would be less constrained.
And the scheme had been devised by its very own department, the Department of Climate Change. Sure, the department was run a by former Treasury deputy secretary, Dr Martin Parkinson. But the Treasury, and Swan, didn't own the scheme, or even like it particularly.
In the end Deputy Prime Minister Julia Gillard agreed with Swan. Tanner, according to sources, did not. Rudd remained torn but finally agreed it should be removed from the budget, a decision that meant it was deferred for at least another three years.
The kitchen cabinet was scheduled to meet on April 27 to decide exactly how to explain the delay, and the conditions under which the government would pledge that the ETS policy would be revived.
News of the decision had also filtered through to a few members of the broader cabinet, who had determined to try to wind it back when cabinet met to ''ratify'' the budget on April 29. But on the morning of April 27, the Herald disclosed the decision to remove the scheme from the budget in a front page article entitled ''ETS off the agenda until late next term''. It was the first many ministers and senior public servants had heard of it.
Knowing the back story helps explain why the government's response on that day was so confused.
It was early afternoon before the Prime Minister emerged, at a pre-arranged visit to Nepean Hospital, to confirm ''the implementation of a carbon pollution reduction scheme in Australia . . . will be extended until after the conclusion of the current Kyoto commitment period, which finishes at the end of 2012''.
A spokesman was unable to explain the conditions under which Labor would reconsider the scheme until quite late that night - we now know because the kitchen cabinet was meeting all afternoon to try to figure them out.
By the next day Wong was finally clarifying - there had to be ''credible action'' from China, India and the United States, and some resolution of the Copenhagen deadlock over how national emission reduction efforts are checked.
In other words, the government was now advocating the same ''wait and see'' position the Prime Minister himself had previously described as ''absolute political cowardice'' and an ''absolute failure of leadership''.
Bogged in the policy ramifications of the scheme for the budget and for the mining tax and concerned about countering the Coalition's ''great big new tax'' campaign, it seems the government as a whole forgot to take a step back and consider the political ramifications of a Prime Minister arguing in favour of something for years and then suddenly arguing almost the exact opposite.
Such as that it might become an issue of credibility, or that in a highly centralised government where the Prime Minister had carried the argument in favour of an ETS for years, the credibility problem would be his. Such as that the relationship between a leader and the people he leads is more than a mechanical policy exercise.
Now the Prime Minister is insisting that he still believes an emissions trading scheme is essential. And undoubtedly he does, or he would have given in to the NSW Right ages ago and killed it.
The government is working overtime on ''green'' pre-election announcements, especially on energy efficiency.
But now, despite all his work on the emissions scheme, despite all his efforts at Copenhagen and in the months leading up to that meeting, despite the fact the Coalition was so determined to avoid meaningful action on climate change they clawed down a leader, political misjudgment means it is Rudd who is struggling to convince the voters to believe him.