I watched Penny Wong on the 7:30 report defending the government’s emissions trading scheme against the criticism, made here and elsewhere, that initiatives such as the government’s home insulation scheme will have no effect except to reduce the price of permits and therefore the costs faced by large emitters. She did a very professional job, neither denying the criticism (which she couldn’t honestly do) nor conceding its validity.

In a long interview, she made only one substantive point, which has also been made elsewhere. By reducing the cost of reaching an emissions target, initiatives like the insulation scheme will make it easier for the government to set more ambitious targets.

I’m happy to take her at her word. The policy debate leading up to the choice of a 5/15 target was undertaken before the full severity of the financial crisis and the need for a $42 billion stimulus became apparent. So, having introduced a new measure to reduce emissions, the government is already in a position to tighten the target by an amount equal to the emissions saved.

If the package is passed unamended, there won’t be another opportunity until 2020, at least without hugely increased competition. So, I’m waiting eagerly for the announcement.