Why Rudd Dropped the ETS Now

The ETS was a dog of a scheme with no benefits for Australia and Australians. But Rudd held on tight to it for one reason, and when that reason went, he dropped it. Some will quibble with the assertion that the ETS has been dropped, when it has been delayed for implementation to 2012. But remember that Rudd is a bureaucrat and something that is delayed will never be implemented. It was delayed because it is a dog of a policy. But Rudd has been so gung ho over it for political reasons, he cannot drop it now, even though he cannot use it. So it is being delayed until just before another election, when it will not be implemented.
Some call the ETS a tax on everything, but that isn't the value of it to Rudd. It is a pork barrel. Rudd, with such a pork barrel can bankroll an election campaign and another round of election promises. He can do so without extending the already significant debt appearing on Australia's books because he can claim the expenditures are paid for by the ETS slush fund. This was going to be popular with the support it had been given by international lobbyists that Rudd had declared his support for it in rolled gold terms, describing it as the great moral challenge of our age.
In opposing the ETS, the conservatives (and greens) have severely limited Rudd's access to the slush fund. However, Rudd was able to use the lobbyist support to hound the conservatives over the issue. This initially had impacted to roll Dr Nelson and then Mr Turnbull from the leadership of the Liberal Party. However, with the ascension of Mr Abbott and the new policy that was getting popular support, Rudd had a policy on his hands which wasn't going to be politically useful to him. But it was still going to be a slush fund and Rudd needed that money.
Then came another source for a significant pork barrel. It wasn't painted in those terms, but then neither was the ETS. The new slush fund was the health policy which took 30% GST from the states. This was not going to be of interest to any state, but any state might be able to use the loss of ready cash to leverage a slush bucket for themselves. Which is what NSW proudly claimed when Kenneally said what it was that got her to give support for the pork barrel. Kenneally faces an election in the first half of 2011. Victoria is due for an election soon too, but the pretend argy bargy was also useful in leveraging Western Australia, who will never profit from such a deal as they will not get a slush fund for their next election and there is no benefit for them in giving away their GST take.
Rudd has lost his need for an ETS with the health deal, and so bad policy will be delayed for the short term. But the ETS can be resurrected in the future if the ALP need a new slush fund and if somehow it becomes popular again through international lobbyist efforts. But really, it has been dropped, and good riddance.