Never mind the terminator and the exaggerator, there are important issues at stake in the Labor and Coalition plans

Is Kevin Rudd a carbon tax terminator or exaggerator? That appears to be the day’s fatuous political question.

The answer, if we have to, is he’s a bit of both. Kevin Rudd is “terminating” the carbon tax, if you can use such a dramatic word for a decision to end it one year earlier than already planned. And even though the now brought-forward emissions trading scheme compares well with the Coalition’s Direct Action alternative, he is also resorting to some dodgy comparisons to sell it.

Announcing that the floating price will start in July 2014, the prime minister has repeatedly said that under Labor the average family would be $380 better off, while under the Coalition it would be $1,200 worse off “once Direct Action was fully implemented”.

It is a classic apples and oranges comparison.

The $380 calculates the per household benefit of the one-off impact in 2014-15 of lower power prices, compared with what they would have been under the legislated fixed price of $25.40. Given that the carbon price was due to float in July 2015 anyway, the comparative benefit for households and businesses is obviously temporary.

The $1,200 is a revised government calculation of the cost per household of what the Coalition would have to pay from government coffers for Direct Action by 2020, based on Treasury estimates of what it would cost to meet Australia’s targets without buying any international permits – as the Coalition proposes to do.

When the former treasurer, Wayne Swan, first announced the figure it was $1,300 per household, but Australia’s forecast emissions have fallen a bit since then so it has become a bit cheaper. Even so, comparing a one-off benefit next year to a long-term cost in 2020 isn’t exactly fair.

But behind the spurious comparison are some real questions, and some very important points of difference.

Labor plans to link with international carbon markets and allow Australian businesses to meet their emission reduction obligations in part by buying permits overseas. This is strongly backed by business groups and acknowledges the point the Coalition itself used to make – that it doesn’t matter to the global climate where in the world an emission reduction is made.

Bizarrely, Tony Abbott makes a virtue of his intention to achieve all of Australia’s emissions reductions domestically, saying it will “produce a better environment here in Australia”.

He attacks Labor because under its scheme allowing abatement to be bought internationally, Australia’s emissions will be lower than they would have otherwise been by 2020 but will not be lower in absolute terms because some of our target would have been achieved with abatement that has happened overseas.

But according to the Treasury modelling behind Rudd’s attempted per household comparison, achieving all Australia’s abatement domestically would cost the economy twice as much as under the government’s internationally-linked market-based scheme.

Another comparison worth making is how each side of politics could cope with a higher target than the 5% by 2020 minimum – since that is what Australia will inevitably have to do.

As the former Liberal leader, Malcolm Turnbull – who lost the job because he supported emissions trading – explained in 2011, continuing to use the Coalition’s big government taxpayer-funded scheme to reduce emissions by more in the long term would “become a very expensive charge on the budget in the years ahead”.

And, as he said on the ABC’s Q&A last week, Direct Action “is not designed to go any further than 2020, so it is not a long-term policy … if you want to reduce your emissions over the very long term, by which I mean 50 years or so, then you are going to have to have a long market-based price on carbon.”

While Australia has been busy hyper-ventilating about the various alleged cataclysmic impacts of the carbon tax, we have been less focussed on the point of the exercise – to decide on our fair share of the global effort to minimise climate change, which will certainly be higher than a 5% reduction – and then figure out the cheapest and most efficient way to do it.

When we get around to answering that question, it won’t be possible to either terminate, or exaggerate, the answers.