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The Howard government could get away with playing politics with the contentious GST. It could cut and shape it to deliver a Senate outcome because absolutely nothing of critical national importance was riding on it coming in to force.

But the ETS is very different and the latest Rudd/Wong spin-around this week only serves to reinforce the dangers of meddling with energy supply in a country where a third of power consumption is by large, trade-exposed industries directly employing an eighth of the workforce.

The cost and reliability of power supply is central to how we live and making it a political plaything is a dangerous game.

Not surprisingly, the mainstream media focus this week has been on the soap opera that was the Coalition debate on the ETS deal, but the most worrying aspect for the resources sector must be the way the government keeps shifting ground and juggling data to suit its political ends.

Belinda Robinson, CEO of the Australian Petroleum Production & Exploration Association, encapsulates the problem by pointing out that there is now a great deal of the ETS package that has been deferred, delegated or made subject to review and “each of these represents continuing ambiguity and uncertainty.”

For its part, the electricity industry remains convinced that the Wong/Macfarlane version of the ETS continues to send a wrong signal to generation investors as it contains a “$7 billion expropriation of company wealth by the government.” Energy retailers, meanwhile, grit their teeth as they face continuing political unwillingness to acknowledge the essential need to remove retail price controls so that all costs can flow to customers.

“Sovereign risk” is the kiss of death for minerals and energy investment in any country. I spent 24 years as an industry association manager trying to persuade federal governments of all persuasions that Australia is not immune from this perception. The past decade’s resources boom has left the pollies with a false sense of security in this respect, I suspect. The hard truth is that the way in which Rudd, Wong & Co have handled both the ETS and renewables policy will have more than a few energy investors, here and overseas, and their bankers, feeling increasingly uncomfortable.

As an example of the problems the government can create through politicking, the Clean Energy Council has just pointed out in a letter to it that the renewable energy certificate bubble created through populist mishandling of solar subsidies “could delay the commencement of new, large-scale (green) generation projects until 2014.”

UNSW’s Mark Diesendorf, writing in Crikey this week, snapped that “every one” of the decarbonisation promises on which Rudd swept to office in late 2007 – and “reasonable expectations” arising from them – “has been either broken, delayed in implementation or only funded to a negligible degree.” The RET, he argued, has been “designed in a way that ensures its goal cannot be achieved in practice.”

Google Search indicates that Penny Wong has so far used the expression “business certainty” 7,780 times in the climate policy debate. How could any investor, observing how she and the Rudd Cabinet have zigged and zagged on the ETS just since May, persuade himself (or herself) that they are looking at a certain environment for outlays that will run to hundreds of millions of dollars and depend on stable policies for 15-20 years?

A federal election in 2010 means that we will have at least two before 2014 and at least one after emissions trading has come in to force. How many more twists and turns will be applied to the ETS to meet political needs over two elections?