Australia govt faces "day of reckoning" on carbon plans

Wed Aug 12, 2009 7:05pm EDT

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* Australia carbon trading laws face vote in parliament

* Laws likely to be blocked, could lead to snap election

By Rob Taylor

CANBERRA, Aug 13 (Reuters) - Australia's government, fighting to save its carbon trading scheme from defeat, challenged parliamentary rivals on Thursday to drop their opposition, warning of "a day or reckoning" on climate change.

The centre-left government's plan for one of the world's broadest emissions trading schemes faces defeat in parliament later on Thursday with conservative, green and independent lawmakers arrayed against it in a move which could lead to a snap election. "Today is in many ways the big day, it's the day of reckoning on this issue," Climate Minister Penny Wong told state radio ahead of a vote in the upper house Senate, expected around midday (0200 GMT).

"This is a reform that is long overdue, that is in the national interest, that both major political parties said they would implement when they went to the last election," Wong said.

Prime Minister Kevin Rudd, who remains well ahead in opinion polls, wants his carbon trade scheme to start in July 2011 and for laws underpinning it to pass parliament before global climate talks in Copenhagen in December.

If the Senate blocks or rejects the laws a second time, after an interval of three months, it will hand Rudd a trigger for an early election.

With polls showing most Australians favour action to combat climate change, Rudd's Labor has promised emissions cuts of 5-25 percent on 2000 levels by 2020, with the higher end dependent on a global agreement at the Copenhagen talks.

Australia is the world's biggest coal exporter and relies on coal for about 80 percent of electricity generation, prompting industry warnings some coal mines and coal-fired power stations will be forced to close under the carbon-trade regime.

The conservative opposition wants the scheme delayed until next year, after Copenhagen and the outcome of United States deliberations on a scheme to slash carbon emissions.

Green senators want the scheme significantly strengthened, while one key swing vote independent does not want the scheme passed at all and is disbelieving of science pointing to climate shift and any link to human activity.

Opposition Leader Malcolm Turnbull this week set out an alternative plan to cut carbon emissions to help prepare for a snap election, promising to deliver a greener and cheaper scheme than the government's plan.

If defeated in the Senate, the scheme is likely to be voted on again in three months unless the government drops opposition to changes. It would cover around 1,000 of Australia's biggest polluters and was a key promise from Rudd's 2007 election win.

Senior conservative lawmaker Christopher Pyne said the government could return the plan to the Senate much sooner unless it was set on using the rejection as reason for a snap election. Rudd has said he prefers to serve a full three-year term, with elections due in late 2010, but analysts have said he might want an election in early 2010 to avoid a vote later in the year when unemployment is expected to peak. (Reporting by Rob Taylor; Editing by James Thornhill)





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