Penny Wong isn’t really to blame for the growing debacle of the Government’s emissions trading scheme plans. She’s a cipher for Kevin Rudd.

Rudd said in 2007 “climate change is the great moral challenge of our generation … we should be at a stage now in this country where climate change is beyond politics.”

Far from being beyond politics, climate change has been used as a political weapon by the ALP ever since, which is why Australia is now going backwards on establishing a structural mechanism for curbing emissions.

At least the Opposition’s proposed replacement inquiry to mimic the inquiry abruptly cancelled by the Government last week is novel — what do you call a political stunt that exactly copies your opponent’s political stunt? There’s already an Coalition-initiated inquiry into the ETS, heavily biased toward polluter industries. And there’ll be an inquiry into the Government’s ETS bill. This one would be a waste of time. Moreover, it might end up being too clever by half for Turnbull if it gives the Coalition’s climate sceptics a platform. Ron Boswell is probably already warming up his global cooling spiel.

The scope of the inquiry will depend on negotiations between the Coalition and the Greens, who have just proposed their own 13-point-with-the-works terms of reference covering targets, compensation, complementary measures, green jobs and carbon leakage.

Both our major parties have failed on this issue, although at least on the Coalition side, the extent of internal divisions has meant supporters of curbing emissions have had to think creatively about how to do so.

Belatedly, Wong has realised just how badly offside she has got the majority of the environmental movement, although her scolding tone today is unlikely to win too many friends. The broader logic of her piece is a plea to environmentalists to accept that the Government will do a lot more after 2020 but that until then industries need “assistance measures that support Australian jobs”.

This might be true if the Government’s ETS did any transitioning. But with the low emissions target, the handouts for the biggest polluters, and the likely initial low cost of carbon anyway, the ETS will provide no incentives or price signals for Australia’s heaviest industries to do anything other than continue business as usual.

Moreover, as Ross Garnaut demonstrated, and Wong herself acknowledges, delaying action on climate change raises the cost of that action. Wong says that immediately before declaring “we stand ready to set our post-2020 targets to play our part in delivering a global deal to stabilise emissions at 450 parts per million or lower by 2050.” That’d be amusingly ironic except Wong is apparently serious. If she’s ever anything but.

Labor and the Coalition have failed Australia on climate change because they’re locked into the politics of a carbon economy. They want to preserve a heavy-emitting, fossil fuel-based economy because of fears of a backlash from polluter industries and the people who work in them. While other countries — including China — are using the global recession and the need for stimulus package to accelerate their move to a low-carbon economy, our politicians are looking for ways to preserve our polluting industries.

It will keep Australia confined, as the Climate Institute John Connor rightly puts it, to a carbon ghetto, while the rest of the world moves toward industries — and jobs — in a low carbon future.

It’s as if in the 1980s Hawke, Keating and Howard had all decided that abandoning protectionism and opening the Australian economy would cost too many jobs and cause too much of a backlash, and settled for a “transition” to a less protected economy. The sort of “transition” that the Australian car industry is still going through, and will be going through until 2020 at least. Infinite transition.

Instead they understood — even if most voters didn’t — that a more open economy would generate far more jobs than would be lost in the transition. There were some rough patches in the 1980s and early 1990s, but we reaped the reward from those reforms in the long period of growth from the early 1990s to last year.

Hawke and Keating showed unprecedented political courage — and skill — to achieve that. John Howard’s support from Opposition helped. Opponents of reform — rentseeking industries warning of the massive loss of jobs overseas (sound familiar?) and unions desperate to keep industrial power — had nowhere to turn.

On an issue significantly more important than economic reform – albeit every bit as economically important — it would be nice to know the current generation of political leaders could match their forebears, but it seems unlikely. We’ll all suffer the consequences – our kids and their kids most of all.

Putting aside inquiry shenanigans, the basic issue now is whether the Government’s ETS should be passed. Its failure would leave Australia further away than ever from doing something serious about climate change. It’s a wretched shambles of a scheme, unlikely to achieve much if anything except reward big polluters, create jobs for “carbon auditors” and send companies chasing paper around the country. It may not be much better than nothing but its defeat might ensure Australia remains stuck in the “carbon ghetto” for a long time.