KEVIN Rudd was right to ditch, or at least postpone for a lengthy period, the emissions trading scheme. Meanwhile Tony Abbott has made an important and strangely unreported speech, setting out his policy on immigration, which is almost as important, strategically, as the Prime Minister's position on the ETS.

The Opposition Leader's speech does as much good for the nation as Rudd's position on the ETS. Both, I believe, have been misinterpreted.

Rudd has said all along that under his leadership Australia would do no more and no less than the rest of the world in combating climate change. In an interview with me in 2008, Rudd said he thought any international deal would be extremely difficult to achieve. He also made it explicitly clear that his government's approach would involve flexibility. If the global consensus was for more aggressive action, Australia would be more ambitious. If the global consensus was for slow action, Australia would similarly adjust.

This is a sound position. It doesn't mean you are a climate change denier. If most economies broadly similar to Australia - that is, the US, Canada, Japan, South Korea and western Europe - were embracing tough emissions reduction targets under ETS-style policies, Australia should do the same to pull our weight and to participate in a carbon market.

But during the past couple of years it became clear nations were abandoning ETS-style policies. Again, in 2008, the president of the World Bank, Bob Zoellick, prefigured this in an interview with me. If the world could not conclude the Doha Round of trade liberalisation in which everyone was a winner, he pointed out, it would be extremely difficult for it to conclude a climate change agreement in which there would be very big losers.

I spend a lot of time in Asia and during the past couple of years it has become clear to me that no developing nation in Asia, and few developed nations anywhere, would commit to binding targets or participate in a global carbon market. Copenhagen confirmed that the biggest greenhouse gas emitter, China, would not only not embrace any targets, it would not even allow any meaningful external monitoring of the broad carbon reduction measures it might take. With some variation, this is the position of other big emitters such as India and Indonesia.

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