Australia's Senate rejects carbon tax repeal bill

March 20 Thu Mar 20, 2014 7:29am EDT

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March 20 (Reuters) - The Australian government's efforts to scrap the country's carbon tax were defeated in a Senate vote on Thursday, though the bill is likely to return after July when more Liberal senators take their seats.

Prime Minister Tony Abbott wants to repeal the tax, which forces companies to pay to emit carbon dioxide, the main gas blamed for causing climate change.

But opposition Labor and Greens senators united to oppose the move because they say the government's alternative "direct action plan" is too weak.

"Without a credible alternative, Labor cannot support the abolition of the existing clean energy policies," Shadow Climate Change Minister Mark Butler said in a statement.

The bill seeks to remove in June the obligation on 348 of Australia's biggest companies to pay A$24.15 for each tonne of CO2 they emit and repeal legislation that would have launched an Emissions Trading Scheme in 2015.

The bill already has support in Australia's lower house where the Liberal party holds a majority.

The government's direct action plan, which includes a fund that will pay emitters to pollute less, is intended to be the its main policy to meet a target of cutting greenhouse gas output to 5 percent below 2000 levels by 2020.

Australia has among the world's highest carbon emissions per capita due mainly to its reliance on coal-fired power stations. (Reporting by Ben Garside in London; additional reporting by Stian Reklev in Beijing)

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