"The report completely debunks any scare campaigns suggesting Australia is acting alone and provides more evidence that putting a price on carbon pollution is the best way to cut pollution and protect our economy," Mr Swan told reporters in Brisbane.

The report found subsidies for such things as solar cells for homeowners were a "very costly way of achieving abatement, and generally little abatement resulted" - with one estimate equating the cost to a carbon price of $864/tonne.

Tax exemptions for motorists using biofuels in Germany cost their government $1.7 billion a year - the equivalent of a carbon price of around $310 a tonne.

Mr Swan said this showed that "direct action" policies such as that advocated by Opposition Leader Tony Abbott would "blow the budget".

The commission noted that "several countries have introduced or have committed to emissions trading schemes".

Britain and Germany are part of the European Union's cap-and-trade ETS.

New Zealand introduced its own trading scheme in 2008 while Japan and South Korea have flagged ETS but delayed their introduction.

China is considering trialling a pilot ETS in some provinces as part of its 12th five-year plan.

In the US, California appears to be the only state keen on an ETS, moving to the system in 2012.

Greens deputy leader Christine Milne, who is on the multi-party committee working on the ETS, said the report showed Australia would not be moving ahead of the world by putting a price on carbon.

But she said it needed to be coupled with much greater investment in renewable energy.

from 2006...

I am not sure why, but there is a collective silliness infecting the federal cabinet at the moment. The assertion by the Education Minister, Julie Bishop, that Maoists have seized control of school curriculums is a prime example.

Then, Nick Minchin, the oleaginous Finance Minister, solemnly explained to the Senate that the drought was due to a lack of rain. That was topped, for piercing insight, by Tony Abbott's trail-blazing theory that the national obesity epidemic was caused by fat people.

http://www.smh.com.au/news/opinion/right-determined-to-beat-abc-into-own-image/2006/10/20/1160851134743.html?page=fullpage#contentSwap1

While the federal opposition makes plenty of political capital out of reminding the Prime Minister of her carbon tax lie last year, the rest of us are left to desperately hope Joe Hockey is lying now about the Liberal Party's economic policy.

Here's a quick essay question that should be easy marks for a high school economics student:

Discuss the contradiction in the following statement: "You're facing higher interest rates over the next two years, rising prices, Australian families are doing it pretty tough and the best relief you can give them is to reduce the tax burden." For an extra mark, explain the compatibility of fiscal policy whose stated primary aim is returning to surplus with giving income tax cuts and scrapping a resources rent tax - if you can.

It took shadow treasurer Hockey less than a minute from the first question on the ABC's Q&A program to promise that dangerous contradiction of running fiscal policy to counter the Reserve Bank's monetary policy and to imply the intent to get into surplus even quicker than Wayne Swan.

It is the benefit of being in opposition that you don't really have to make sense - you can't do any of the stuff you rave about and it's pretty safe to assume the electorate will only remember the simplistic slogans and most outrageous claims, not the boring detail and more mundane realities.

Hockeynomics 101: the fiscal fumble while canberra bumbles