But once we've donned the belt of the compulsory scheme, the braces of voluntary efforts in effect will be cast aside. And the problem is, it's not clear the belt will be enough to do the trick.

The carbon reduction scheme sets a cap on the national quantity of emissions of greenhouse gases permitted during a year, then slowly lowers the cap each year until the targeted reduction is achieved in 2020. Limiting emissions reduces the supply of emissions-intensive goods and services relative to the demand for them, thereby pushing up their prices. Where the Government sells emissions permits to the big emitting industries, the benefit of the higher prices goes to the Government. Where it gives the permits away, the benefit stays with the emitting industry.

The point is that the higher prices we face - particularly for electricity, and one day for petrol - are intended to discourage us from consuming as much of the stuff. We should use it less wastefully, use more public transport, wear more jumpers around the house and so forth - all in response to higher prices. By such means Australia would become a less fossil fuel dependent economy.

So the carbon reduction scheme relies on people changing their behaviour purely in response to higher prices.

Trouble is, studies show the demand for electricity isn't particularly responsive to changes in price. As the Australia Institute tells us in a soon-to-be-published report, a 10 per cent increase in the price of electricity is expected to reduce household demand for it by only 3.5 per cent. This implies that prices may need to rise a long way to bring about the desired reduction in electricity use.

Why is the demand for electricity so relatively unresponsive to price rises? Partly because a lot of the factors that determine how much electricity we need are relatively fixed: the design of our homes, the appliances we use, and even what indoor temperatures we prefer.

But also because the cost saving from using less energy isn't immediately apparent, but is seen only when the quarterly electricity bill arrives. What's more, electricity bills account for quite a small proportion of most household budgets.

This is why it's surprising that Rudd was willing to design a scheme where no account was taken of the voluntary efforts people with a desire to play their part in reducing global warming were willing to make.

The Government's cap on total emissions is also a floor: nothing that individuals, businesses or other levels of government do to reduce their emissions voluntarily will lower the cap. Rather, the benefit goes to those industries required to hold their emissions within the cap.

The Australia Institute report says what's needed is ''an approach that incorporates the best of both worlds: the certainty and universality of a regulatory approach, and the motivational and inspirational benefits of allowing people to 'do their bit' in a meaningful way''.

Opinion polling shows the great majority of people believe their voluntary actions do make a difference to the nation's total emissions, and that they should make a difference.

When Rudd announced modifications to his scheme in May he appeared to respond to this criticism by setting up a ''carbon trust'', but it turned out to be another con trick.

People who'd spent big bucks buying a Prius car or installing solar panels could estimate how much they were saving on petrol or electricity and then donate the equivalent sum to the carbon trust, which would go out and buy carbon emission permits and rip them up.

In other words, if people were feeling so altruistic, they were free to shell out twice. And this from the man who told us climate change is ''the great moral challenge of our time''.

Ross Gittins is the Sydney Morning Herald's economics editor.

This article first appeared in The Sydney Morning Herald.