As with all complex financial products, when it comes to emissions trading, all is not what it seems. Common sense tells us that banks would never lend money to people who have little chance of repaying it, but the collapse of the American banking system taught us that they do. Common sense tells us that the combination of the new national emission reduction targets with the ACT’s existing 40 per cent target is better for the environment than either policy in isolation. Common sense tells us that because one plus one is two, one policy plus another policy must be better. But in the Alice in Wonderland world of emissions trading common sense is not the compass by which we must navigate. Put simply, the introduction of the Commonwealth emissions trading scheme in its current form means that efforts made by the taxpayers of the ACT to achieve a 40 per cent emission reduction target by 2020 will have no impact on Australia’s overall emissions. The national target fixes the amount of carbon emissions regardless of the actions of the ACT government.