Cabinet looked at this question three weeks ago, and again this week.

Its statements in the first couple of days appeared to leave it with some wriggle room on an emissions intensity scheme. Frydenberg insisted he didn't want to pre-empt the review.

But not by Wednesday.

"An emissions intensity scheme is an emissions trading scheme, that's just another name for it," the Prime Minister said.

The government is now left conducting a review that it is effectively saying it won't listen to.

Prime Minister Malcolm Turnbull knew something was on the nose at the Sydney Fish Markets on Wednesday after his backflip on an emissions intensity scheme. Mick Tsikas

The electricity sector scheme has been advocated by the Climate Change Authority, the Australian Energy Market Commission, CSIRO and Senator Nick Xenophon.

Large energy businesses are also arguing they need a price to create certainty.


The policy consensus was in fact so broad – and the work that has been done on the policy so detailed – that it was regarded as a virtual certainty to replace the clapped out policy options the Coalition has been chugging along with for the past three years, giving the Prime Minister the chance to set up a post-Abbott climate regime.

Having escalated the question of energy security and linking it to climate policies, the Prime Minister had invited chief scientist Alan Finkel to give leaders at Friday's Council of Australian Government meeting his preliminary thoughts on the energy market, bringing the climate and energy issues to the main table instead of seeing them loiter with energy ministers.

The Prime Minister has been left looking insipid. David Rowe

Friday's meeting will be a spectacular case of all dressed up and nowhere to go.

If the choices of government action on climate go to reducing emissions via price, subsidies or regulation, the Coalition has now ruled out price mechanisms. It's not clear that it has the money to reinvigorate subsidies, and it loves to hate regulations like the renewable energy target.

Vague muttering

There is some vague muttering about increasing natural gas supply, without any real indication of how the government is going to achieve that, other than various gas market reforms that have been touted for years.

As things currently stand, the most likely climate regime of any substance will be whatever the states cobble together. Just as they have set up their own various (and not necessarily efficient) climate policies in the wake of a political vacuum on the issue in Canberra in recent years, the outcome now could be moves by them to set up a co-ordinated set of policies.


Does Canberra really want to jettison climate and energy issues to the state governments? (Frankly, they may be safer there).

Meantime, the Prime Minister is once again left looking insipid and at the mercy of the right of his party. Emboldened, Senator Bernardi, for one, was pushing further on Wednesday and saying the government should abandon its Paris climate targets for good measure.

The Prime Minister has failed to capitalise on the possibility of reaching some policy bipartisanship with Labor on the climate change issue.

Instead, the Coalition has gone back to the same sort of simplistic formula – which didn't really work for it – as it used in the last election campaign about higher-versus-lower taxes and presenting itself as the party of workers' interests in lower energy bills.