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Malcolm Turnbull buckles on effective climate action

No one can say for sure now how Mr Turnbull will reduce Australia's greenhouse gas emissions to meet our global agreements without spending untold billions more on largely ineffective handouts to big polluters.

For all intents and purposes Australia now has two federal governments.

Government number one appears to front the people, attend official functions, promise things then backtrack.

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Not happy, Mal!

South Australia's Jay Weatherill and PM Malcolm Turnbull continue their dispute over electricity policy at the post-COAG press conference.

Government number two seems to call the shots and kybosh the other's policy.

No prize for guessing who is the putative leader of the former and who leads the latter.

Look at last week's appalling capitulation on constructive climate policy debate to see how dysfunctional and beholden to the Abbott forces that the Turnbull government has become.

Prime Minister Malcolm Turnbull has ruled out a climate policy option that he explored and backed seven years ago; that he helped ensure remained viable by negotiating its basic infrastructure into legislation this year; and that he took to the election as part of a long-planned review of Direct Action. Having promised adult debate about policy, he has junked it.

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Now a market-based mechanism for reducing pollution in the electricity sector – at a significant cost saving for governments, generators and particular consumers mind you – is dead under his government at least.

Media cheerleaders for the government insist there was never support in cabinet for a so-called baseline and credit scheme. They claim "the cabinet authorisation of the terms of reference for the 2017 climate change review was strictly a housekeeping issue". No surprise that Finance Minister Mathias Cormann said on Sunday that the review was "mere housekeeping" of settled climate policy.

No one can say for sure now how Mr Turnbull will reduce Australia's greenhouse gas emissions to meet our global agreements without spending untold billions more on largely ineffective handouts to big polluters.

Before the July 2 election the Herald asked "could Mr Turnbull deliver steady, unified government?" We answered that "the key will be the scale of any Turnbull election victory. A strong mandate would give him significant leadership certainty against Mr Abbott, the power to rein in the extremes and greater sway with minority senators."

The scale of victory was perilously small and the precarious nature of Mr Turnbull's leadership now informs every decision his cabinet makes.

Since 2013 the Herald has proposed that the Abbott then Turnbull governments develop a baseline and credit scheme to morph Direct Action into a much cheaper, consumer friendly and effective method for reducing pollution. Such a scheme rewards electricity generators who find cleaner ways to produce energy and punishes those who lag. The net cost to consumers is in effect zero and can be a benefit if the new technologies are more effective in cutting emissions. It is not a carbon tax. And such a scheme can easily be extended later to other polluting sectors.

What's all the more galling about last week was that Mr Turnbull had the ammunition to demolish the arguments of Tony Abbott and Cory Bernardi. He had myriad reports and research including extensive modelling by the Australian Energy Market Commission and the Australian Energy Market Operator that showed an emissions intensity scheme to be the cheapest and most reliable way to reduce emissions. He had a report from Chief Scientist Alan Finkel that was presented to state and territory leaders on Friday. It showed the plan under review would save the nation's electricity consumers $15 billion over a decade.

​What's more, the Prime Minister's attack on South Australia Premier Jay Weatherill for suggesting the states could go it alone was disingenuous. NSW, for instance, had the nation's first baseline and credit scheme for the electricity industry until 2012 when Labor's national emissions scheme began. The Independent Pricing and Regulatory Tribunal said in its post-mortem on the NSW Greenhouse Gas Reduction Scheme that the system "encouraged the lowest cost, most efficient means of abatement; achieved a high level of compliance; and kept administration and compliance costs low".

Yet Mr Turnbull, claiming the baseline and credit scheme would increase power prices, appears to have buckled to the forces he defeated 15 months ago with a promise of a new way of politics. He seems to be behaving as though he thinks his political survival takes precedence.

It will take more than one market mechanism to deliver the emissions reductions Australia requires. But we cannot afford to rule out the best options through political self-interest. As we argued before the election, Australia had the seeds of a bipartisan approach to climate change: "All that remains is for Mr Turnbull to silence the deniers and stop the scare campaigns."

The Prime Minister has proved too weak to do so.