The key question of whether petrol will be included in the Government’s emissions trading scheme is starting to get real attention. The Government’s apparent inability to combat the Coalition’s petrol excise stunt has raised real fears that it will shirk the political difficulty of including transport in the trading scheme.

Andrew Bolt’s discussion of this on Insiders yesterday suggests conservatives and the last greenhouse denialists are rubbing their hands in anticipation of another issue with which to beat the Government about petrol prices.

This is becoming a totemic issue about how serious the Government is about carbon. And that means it can either go badly wrong for the Government or be a potent weapon. Properly used, it could restore to the Government some of the policy high ground it has lost in deciding to fight on Emo Man Nelson’s preferred territory of populism.

There’s no need for crazy brave stuff on this issue. It can be played cleverly. As Laura Tingle points out today in The AFR, the emissions trading scheme doesn’t need to be on top of fuel excise, it can replace it. Greens Senator Christine Milne pointed this out in 2006, when she used Estimates to expose the Australian Bureau of Agricultural and Resource Economics’s usual stunt of loading in every possible cost in its calculations of the impact of lowering carbon emissions (more on ABARE later this week). In fact there’s no reason why the Government could not remove the excise and add the carbon cost, which will respond over time to market forces and, if necessary, a long-term lowering of the total emissions cap.

Malcolm Turnbull thinks it’s better to regulate greater fuel efficiency and emissions standards than include petrol in the emissions trading scheme. It seems Emo Man isn’t the only one infected with petro-populism. Never mind that economically, it’s more efficient to use price signals to achieve outcomes than the blunt instrument of regulation. And that approach hopes consumers will be too busy celebrating not paying more for petrol to notice they’ll be paying a lot more for cars manufactured under stricter standards.

That’s the problem with trying to cut carbon emissions. It will cost us, somewhere. Our behaviour won’t change unless it does. So far, the only major party politician who was willing to say this loudly and clearly to voters was John Howard, on the eve of his political death last year.

It would help the integrity of the emissions trading scheme enormously if the Government mustered the courage to tell voters they were stuck with higher petrol prices and, for people doing it tough – like Emo Man’s wheelchair-bound Tarago drivers with five kids and a kilo of sausages in the back – the best way to help them is through the welfare system, not by trying to cut the cost of petrol.

Last week suggests courage isn’t in plentiful supply in Government ranks.