I have been slowly working my way through the Garnaut draft report having made a B-line for innovation (Chapter 16) when it first came out. Near as I can tell, Chapters 1 to 14 are fine and a good read but there is nothing really new. Chapter 15 is where it all happens. That is where the details of how an emissions trading scheme will be set up are discussed. It is a heavy chapter and so I am still considering it. But the three key issues of ‘point of obligation,’ permit allocation mechanism and how to deal with the trade-exposed industries are all there. Over the next week, I will try and comment on each separately. For the moment, let me claim that it is Chapter 15 that will prove the most contentious and discussed. It is also where the government will face its largest political and economic challenges because you can accept Chapters 1 to 14 and still have massive disagreements after that point.