Not happy, Mal!
Malcolm Turnbull still seethes over what Labor did to him on Medicare during the election campaign.
Labor's inflated claims that the government planned to privatise universal health care were devastatingly effective. Turnbull frequently describes the campaign as the first incursion into Australia of post-truth politics - telling a bold-faced lie and getting away with it.
In reality, it was the Coalition under Tony Abbott which first made post-truth politics an art form in this country with its hyperbolic attacks on carbon pricing.
Turnbull was a passive observer as Abbott, Barnaby Joyce and others made inflated claims about the impact of "the great big tax on everything". It worked so well it became the template for Labor's Mediscare campaign.
This week, the chicanery caught up with the Coalition when Turnbull, his Energy and Environment Minister Josh Frydenberg and the government in general fell victim to the hyperbole all had helped nurture over the years.
In doing so, the Prime Minister's credibility took a massive blow and consumers and businesses were condemned to a future of second-best energy policy.
Politically, the government surrendered one of its most potent attack lines of recent years - that Labor stood for higher power prices. It has been an epic disaster.
Ironically, one of the few people in the Coalition with any intellectual honesty is the man who fuelled the trouble - Liberal Senator Cory Bernardi.
The South Australian firebrand doesn't believe in man-made climate change and, therefore, sees no need to have any emissions reductions targets, let alone policies to reach them. Simply, he is happy to keep burning brown coal to generate electricity because that is the cheapest form of energy.
But for the vast majority of his colleagues, this week's policy surrender locks in the Coalition to meeting the 2030 target of reducing emissions by 26 per cent-to-28 per cent on 2005 levels, while not being allowed to use the mechanism that all the experts say would have the least impact on the economy, power prices and security of supply.
That is an emissions intensity scheme in the electricity sector in which generators would be penalised only if they breached a baseline limit. Cleaner emitters who stayed below the baseline would not pay anything and would receive free credits which they could to trade to bigger polluters.
The whole idea is to shift baseload supply towards gas until renewable energy becomes reliable enough. It was in August 2015 that then Prime Minister Tony Abbott, alongside Julie Bishop and then-environment minster Greg Hunt announced the 2030 targets and put in train this transition.
At a press conference, they announced their climate change policy would be reviewed in 2017 to find ways to meet those targets.
Their fig-leaf policy of direct action, cobbled together over the summer of 2009-2010 out of fear Kevin Rudd would call a double-dissolution election on climate change in early 2010, involved hoiking money out of the budget to pay people to lower emissions.
This was clearly unsustainable over the longer-term, both financially and environmentally. More so now that the budged is mired in deficit.
Back in August 2015, Hunt had Abbott agree the review, to be conducted in 2017, would examine post-2020 the purchase of cheap permits from developing nations as a way of helping meet the 2030 targets.
Because Abbott was so averse to anything that resembled a market mechanism, he agreed reluctantly.
He said he would rather try first to achieve emissions cuts domestically "rather than get them from other countries".
Otherwise, Hunt and Abbott said one-third of the post-2020 reductions would rely on a continuation of direct action. This would cost $200 million a year, or $2 billion over the decade straight out of the budget, but direct action would also include "safeguards" which is a market mechanism to ensure emitters stay under a declining emissions cap or pay a penalty.
Sound familiar?
The safeguards mechanism developed by Hunt, right under Abbott's nose, was the draft version of the Emissions Intensity Scheme on the electricity sector that Turnbull killed with a sledgehammer this week after Frydenberg alluded to having a look at the idea as part of the policy review, and Bernardi and Co pounced.
Therefore it was of no surprise in government this week that chief scientist Alan Finkel, along with a joint report by the Australian Energy Market Commission and the Australian Energy Market Operator, all concluded the government would not meet the 2030 targets on current policy settings and an EIS had to be the central plank of post-2020 policy.
The other two options - expanding the mandated use of renewable energy or regulating the closure of coal-fired power, would have a greater impact on the economy, create higher power prices and lead to more blackouts.
Not even Abbott, back in 2015, promised the 2030 targets could be achieved without an impact on prices or the budget.
"This is certainly not without cost but the costs are manageable,"he said.
But the Coalition rebels have since regressed, saying now there should be no cost.
And because the government is so scared of its own tail, it reacted by rejecting the very mechanism not only recommended by the experts, but one that had been created surreptitiously by Hunt and which was to be developed into a de facto EIS.
And one that ticks every box with regard to the government's key promise to meet the 2030 targets while keeping prices down and the lights on.
Labor, which promised an EIS at the last election, is now the party of lower prices.
Everyone is jumping ugly on Frydenberg because he said on Monday, after releasing the terms of reference for the review, that the EIS was worthy of consideration.
Front-running by ministers is not allowed. He was ripped a new one on Tuesday night in cabinet.
He was meant to clam up and allow the policy to be developed by stealth and consensus and then sprung on the backbench and the broader public.
The same internal criticism was made of Scott Morrison when he spruiked increasing the GST.
Now Frydenberg has the monumental policy task of mapping out an energy transition path while his hands are tied. And we'll all be worse off for it.
