Mr Howard, for all his real and perceived faults, is not an idiot. He is, however, a very deft manipulator of political advantage and in most cases will go where the votes are (notable exceptions being the republic, "sorry" and perhaps the GST).
With regards to Kyoto, he and the Liberal party know they can get away from it because the US hasn't ratified either, and because he has the support of the fossil fuel industry to do so - his economic arguments being that the economy, in the form of coal export and energy industries, would suffer. He's probably correct in his judgement there, but this doesn't justify a short term policy of economic rationalism in favour of a long term policy of global cooperation towards better environmental management.
Kyoto may not be a cure-all for global warming and carbon dioxide, but it's the best step in the right direct we have. If more of the big polluters ratified and obeyed it, then it might actually be quite effective, like the Montreal Protocol was for eliminating CFCs almost entirely. And if investments were made in renewable energy technolgy were made (2% is really pathetic...), then concerns about reducing productivity (like in the US steel industry) could be somewhat allayed.
So yeah, we haven't ratified because it's politically and economically easier not to do so.
