After this month's release of the draft Garnaut climate change review, Federal Minister for Climate Change and Water Penny Wong was careful to give no clue or hint as to the Federal Government's future intentions regarding a carbon pollution reduction scheme. And with good reason because, as Professor Ross Garnaut himself said at the time, establishing an emissions trading scheme that produced substantial cuts in greenhouse gas emissions without unduly stunting economic growth or penalising low-income families was a diabolically difficult problem.

With yesterday's release of Federal Government's green paper on a carbon pollution reduction scheme, we are still no closer to gaining any real insight into the Government's thinking, save that road transport will be included in a future emissions trading scheme and that inclusion comes with the proviso that any likely increase in petrol and diesel prices will be offset by a ''cent for cent'' reduction in the fuel excise.

Green papers put forward ideas and opinions for consideration, public discussion and consultation, so it is not surprising that this paper has a an each-way bet on all the contentious issues Garnaut canvassed in his review except where it ignores the warning that offsetting fuel price rises will remove the incentive for motorists and road transport companies to use less fuel.

While establishing an emissions trading scheme is principally a matter of detailed science economics, the implementation and sale of any scheme is a political matter, and a decidedly problematic one, so it is not surprising the Government has moved to reassure voters that fuel prices will be adjusted periodically to ensure they do not rise independently of world oil prices.

Qualifications galore litter the hundreds of pages of the green paper, just one of them centring on whether the start-up date for an ETS will be 2010, as Prime Minister Kevin Rudd promised before the last election and Garnaut now leans towards.

The paper offers few indications on how low or high the Government might set the price of carbon when the new scheme is introduced though estimates that a carbon price of $20 a tonne may have only a 0.9 per cent impact on the consumer price index suggest this might well be the starting price. At this price, though, the impact on the price of electricity will be a significant 16 per cent.

The paper is more forthcoming on how the economic pain resulting from the introduction of an ETS ought to be ameliorated. It proposes, for instance, that electricity generators be compensated both by limited amounts of direct assistance when an ETS is established (though this is not specified) and by being allowed to receive up to 90 per cent of their permits free of charge.

Environmentalists will criticise the singling out of ''vulnerable industries'' for preferential treatment but, so far as electricity generation is concerned, the Government has few other options, given Australia's heavy reliance on coal-fired power and the long lead time generators are going to require to make their electricity cleaner and greener.

The many jobs and large amounts of export income generated by other heavy greenhouse gas emitters such as pulp mills, cement manufacturers and aluminium smelters guarantee these industries will be given extra time to get their houses in order.

Whether generators and other heavy polluters should be compensated for losses in the value of their assets is another vexed issue, and still up for debate, though it is hard to see how compensation can be avoided given the enormous investment that will be needed to create cleaner industrial processes.

Still, many economists argue that it should be confined to those trade-exposed industries that might simply close down and relocate overseas.

This one issue alone encompasses the economic and political complexity of introducing an ETS. Little wonder the green paper dwells at length on how consumers, especially those on low incomes, should be compensated. Given the complexities of devising a national trading scheme, and the political risks associated with putting it in place, it is not surprising that Wong and Prime Minister Kevin Rudd are now manoeuvring for a delayed start. If it does all its sums correctly, the Federal Government will be applauded around the world for its far-sighted selflessness, and rewarded (perhaps) with an economy that boasts a vibrant renewable energy sector and saleable expertise in making dirty industries cleaner.

Get it wrong, though, and carbon-intensive industries (together with thousands of jobs) will move offshore and the Australian economy will become even more heavily reliant on service industries and mineral exports (with no value-adding to speak of), leaving an electorate sullen and resentful at having to pay higher energy and food prices for no tangible benefit.