The Australian Financial Review

By no longer being carbon copies of Labor, the Liberals can win back Middle Australia, writes Tom Switzer.

Conventional wisdom says that the Liberals are on a hiding to nothing. By rejecting the emissions trading scheme, the argument goes, Tony Abbott will alienate the Opposition further from the Australian people who demand urgent action on climate change. But far from presaging an electoral debacle, the new Liberal leader's opposition to Labor's plan could be a political godsend for the coalition.

The key to successful opposition is to make and win arguments. Seeking compromise and pretending bipartisanship exists when it doesn't all play into the hands of the government - these tactics are a ticket to a long time in the political wilderness.

Ever since the release of the Garnaut Report 18 months ago, the Liberals have dithered, equivocated and vacillated over the appropriate response. When it finally established a policy under Malcolm Turnbull to back the Rudd Government's scheme, the party faithful revolted and its base crumbled. Throughout the process, the Opposition was badly trailing Labor in the polls and heading towards electoral oblivion. Abbott, however, could change all that.

Whatever his flaws, Abbott is widely praised as an articulate and clear communicator. In coming months, he will not only subject Labor's agenda to impose potentially crushing costs on business and consumers to some much needed scrutiny; he will spell out in the most forceful and coherent language the flaws of the ETS.

The message will go like this: why on earth should Australians let an ETS kill investment, lower growth, drive jobs to nations where costs are cheaper and raise prices that would ripple throughout the energy chain and touch every corner of the economy when no nation that matters - China, India the US - will do much to reduce carbon emissions?

In making this case, Liberals would not only be protecting the national interest. They would give themselves a chance to win back key segments of the Australian working and lower-middle classes who formed John Howard's core support in 1996, 1998, 2001 and 2004. It is these people to whom Kevin Rudd has appealed in the past two years. And it is these people whom Tony Abbott aims to win back to the conservative cause. They are primarily motivated by hip-pocket issues. And they help swing elections.

Admittedly, the polling evidence is mixed, but it is a fair bet that a well-argued and executed scare campaign that is modelled along the lines of Paul Keating's opposition to the GST in 1993 could very well play well in Labor's marginal seats.

Go back to 1991. John Hewson's Fightback!, which showcased the GST, was widely popular. Both the press and the people gave it the thumbs up. In 2008, Rudd's Garnaut Report, which showcased the ETS, was also widely popular. Again, both the press and the people gave it the collective seal of approval. Indeed, just as Hewson's GST destroyed Bob Hawke, Kevin Rudd's ETS destroyed Turnbull and Brendan Nelson.

But just as Keating ran a very effective scare campaign, Abbott will try to do likewise. He even paraphrased the Labor nemesis yesterday when he said: "If you don't understand an ETS, don't vote for it. And if you do understand it, you'll never vote for it." There are, to be sure, differences, but the point here is that scare campaigns can capture the hearts and minds of Middle Australia under the pressure of rising interest rates.

The politics of climate change, moreover, have changed dramatically. According to a Gallaxy poll at the weekend, a clear majority want to wait for the world, specifically the outcome of the Copenhagen conference next week, before Canberra commits to an ETS. Moreover, 80 per cent of Australians think that Labor is rushing through what ministers boast is the most radical reform in a generation without explaining it properly.

The rich and developing nations, far from being united on fighting global warming, remain deeply divided. The US Senate will probably fail to pass what Democrat and Republican critics call the cap-and-tax bill during the 2010 mid-term election year. The EU's ETS has not worked as intended: according to the European Commission figures, emissions from the 27 member states rose by 1.9 per cent from its implementation in 2005 to 2008. And last week's reports that several IPCC scientists allegedly manipulated data to strengthen the case for man-made global warming suggest that the climate is indeed changing.

All the Liberals have to do to benefit from this strategy is keep their heads. But if the uncontainable ambition by certain individuals destabilises Abbott, then their role as the party of opposition will become firmly institutionalised for a generation.