In the coming months, before the emissions trading legislation comes before the Senate, the Rudd Government needs to think hard about what it is trying to achieve.

Does it plan to buy into the lowest common denominator populism of the Coalition? This approach drags the debate backwards, undermines the global climate fight, and risks alienating a significant portion of Labor’s own base who voted for leadership on climate.

Or will it lead from the front, inspiring Australians to embrace this challenge to rebuild, upgrade and retool for a zero emissions future? Will it appeal to people’s best instincts, articulating a positive vision of preparing ourselves for the future by investing in a systemic roll-out of energy efficiency, mass transit and renewable energy?

The final answer will be in the 2020 target that is promised in the legislation by the end of the year, but the signals from yesterday’s Green Paper were decidedly worrying. The Paper was framed entirely around costs and cash compensation instead of the opportunities for transformation the Greens have been advocating.

The Canberra insider view, surprisingly articulated even by the eminently sensible Bernard Keane last week, is that, while the Greens position makes perfect sense, it is politically unacceptable and won’t pass muster with the electorate. This is a leftover from the Howard years where good policy was abandoned in favour of pandering to special interests and appealing to base populism was seen as effective politics.

I don’t believe that that is the case anymore. The Canberra insiders are completely misreading the level of anxiety in the community about the science of climate change and the awareness that, if we don’t act now, there will be nothing that we can do to avoid runaway climate change when the politicians finally wake up.

All around the country, I and my colleagues are accosted by people demanding to know what we are going to do to help them reduce their emissions. Why isn’t the Government helping them install insulation and solar water heating? they want to know. Why isn’t the Government embracing the smart, baseload solar technologies that we are exporting to the US and Spain? What are the Greens going to do about it? They feel that hading out cash compensation, while doing nothing to bring on alternatives, is cruelly setting them up for a fall when the crunch comes.

Voters were outraged by the capturing of the Howard Government by the greenhouse mafia. They will be equally outraged by the Rudd Government’s capture and storage in the pockets of the coal sector. This is the one and only case where I am hoping for leakage!

Emissions trading is supposed to go hand in hand with a suite of measures to unleash creativity and innovation and stimulate investment in the zero emissions alternatives. Instead, we have every mechanism imaginable to protect existing investments. The Green Paper even proposes free permits and cash handouts to protect investment in coal generators. This will deaden any stimulus to invest in the much-needed new infrastructure for renewables and energy efficiency.

Just as with increasing the price of petrol with one hand and decreasing it by the same amount with the other, the Government has put its foot on the brake and accelerator at the same time. The wheels are spinning madly, we’re burning up fuel, and we’re going precisely nowhere.

Prime Minister Rudd and Minister Wong would do well to read Nelson Mandela’s first lesson of leadership in last week’s Time Magazine: “Courage is not the absence of fear, but the ability to inspire people to move beyond fear.”

Rudd and Wong are so paralysed by fear that, for all their talk of transformation, they are clinging to the past. The community has moved well past the Government towards the Greens position, opening the field for courageous leadership.

Rudd and Wong would do well to consider this before bringing legislation before the Senate that gets the support of the Coalition but loses the community.