Tony Abbott gained not one, but two Oxford Blue in boxing, his online biography tells us. But on Monday, he fell for the simplest of sucker punches as he reacted to Kevin Rudd’s move to “axe the tax”.

Rudd’s decision to fast-track the transition of Australia’s fixed price on carbon to an emissions trading scheme (ETS) prompted Abbott to contemplate the nature of carbon pricing policy. "This is not a true market," he told reporters during a campaign visit in Sydney. "It's a market, a so-called market, in the non-delivery of an invisible substance to no one."

The phrase may well have been sourced by Abbott's quip-writing team from a comment piece penned by Jeremy Warner, assistant editor of the arch conservative British daily The Daily Telegraph. Warner wrote three years ago that “the carbon market is based on lack of delivery of an invisible substance to no-one”. That the Daily Telegraph could have been an inspiration to Abbott should not surprise us: another of its columnists, James Delingpole, provides fertile ground for some of the more imaginative complaints made about wind farms by Abbott's team.

Abbott’s comments, parroted or not, suggest firstly that this Rhodes scholar who studied for an economics degree does not understand financial markets. They are full of commodities traded in their trillions but never actually delivered, be they invisible substances such as natural gas, or very visible products such as cattle and pigs.

Tony Abbott answers questions during a press conference in Sydney on 15 July 2013. Photograph: Paul Miller/AAP Photograph: PAUL MILLER/AAPIMAGE

What it is that Abbott thinks takes place inside a commodities or a futures exchange? When cattle and pig futures are traded, the animals are not herded through Wall Street. That would require heroic efforts by cowboys of a different kind to those that populate the trading firms. And a lot more cleaners.

Leaving aside Abbott’s own Direct Action policy – which his spokesman on climate change issues, Greg Hunt, explained yesterday would include a “reverse auction” of this very same invisible substance that can’t be delivered – the issue goes beyond Abbott’s understanding of financial markets. It tells us about where he and his advisors source their information to frame their climate change policies. And as his “climate science is crap” comment revealed in 2009, it’s usually from the depths of the climate denier blogosphere.

The depiction of C02 as colourless and odourless, and by association also harmless, is a favourite of such blogs. Surely, the argument goes, if a substance cannot be touched, smelled or seen, then it could not possibly have any greater impact than being succor for plant life.

In Australia, the Galileo Movement pushes numerous references to C02 as colourless and invisible. The notorious blogger Jo Nova, a Galileo advisor, writes about the “scammability of permits for invisible unverifiable goods”. Another prominent climate denier, Brian Sussman from the blog Climategate, complained about California’s newly installed carbon price and the decision to allow “government bureaucrats to institute the trading of a “commodity” that no one is able to see, touch, taste or smell.”

You can spot the trend. This may explain why one of the centre-pieces of Abbott’s Direct Action policy has long been his 15,000 strong “green army”, which won’t be wasting time chasing invisible and odorless gases, but will be doing practical and sensible things like cleaning up litter and planting trees – things that can be touched, smelled, seen and delivered, but won’t do much about C02.

Abbott's ascension – courtesy of an influential group of conservative ideologues – mirrors the recent trend in the US where the Tea Party and climate denier influence in the US republican party (90% of its leadership rejects climate science) forces its candidates to row far to the right in pre-selection. So far right, in fact, that it’s impossible to regain the middle ground.

The Liberal party gladly sacrificed two leaders on climate change policies before settling on Abbott. Presumably, it wouldn’t hesitate to do so again if it feels that the opportunity for power was now slipping from its grasp.

Given Rudd’s success in the polls, the Australian political narrative is now in rapid reverse. Labor is now no longer trailing. How quickly before the Coalition panics and takes action? How far are we away from returning to 2009 and what some people have described as the “dream team” of climate change policy – a competition of ideas and ambition between the country’s two most popular politicians, Rudd and Malcolm Turnbull?

What this episode tells us is that Rudd is succeeding where Julia Gillard failed: the prime minister is peeling back the veneer of Abbott’s leadership. No issue is so revealing as Abbott’s real position on climate change, and Abbott has been caught dog-whistling to the climate skeptics and denialists that put him into power.

Rudd senses this, and intends to retake the territory that Gillard couldn’t hold. Abbott has lost the first round. He’d better start paddling.