* Carbon tax vote major victory for PM Gillard
* Opposition says will repeal carbon tax if elected
* Initial carbon price set at A$23 a tonne
By James Grubel
CANBERRA, Oct 12 Australia's plan for a national
carbon price passed its biggest political hurdle on Wednesday
when the lower house of parliament voted in favour of the scheme
-- a major victory for beleaguered Prime Minister Julia Gillard.
Gillard, who is staring at electoral defeat according to
opinion polls, has staked her minority government's future on
the sweeping economic reform that will impose a carbon tax on
around 500 of the country's biggest polluters from July 2012,
before moving to a carbon trade scheme in 2015.
"Today is a significant day for Australians and the
Australians of the future who want to see a better environment,"
Gillard said before the bills passed by 74 votes to 72 in the
House of Representatives.
Australia, the world's biggest coal exporting nation,
accounts for only around 1.5 percent of global emissions, but is
the developed world's highest per capita polluter due to a
reliance on coal for 80 percent of its electricity generation.
The carbon legislation, and a bill for A$300 million ($298.7
million) in assistance for the steel industry, must still pass
the upper house Senate in a vote due in mid-November, but the
government and Green senators have the numbers to ensure the
bills will become law.
The carbon plan, if passed by the Senate, would see
Australia join the European Union and New Zealand with national
emissions trading schemes, while the United States and Japan
have smaller regional schemes.
The government and the Greens hope the carbon tax
will reignite momentum for a global emissions reduction
agreement at climate talks in Durban, South Africa, in December.
GOVERNMENT CELEBRATES CARBON VOTE
Government lawmakers applauded when the lower house vote was
taken, while Gillard and her ministers hugged each other and
waved to supporters . However anti carbon-tax
protesters later disrupted parliament by shouting at the prime
minister from the public galleries.
Two previous attempts to pass laws for a carbon
price failed in 2009, and were partly responsible for the ruling
Labor Party's decision to dump then Prime Minister Kevin Rudd in
favour of Gillard in June 2010.
The carbon price is the central plank in the government's
plan to cut carbon emissions, blamed for global warming, by 5
percent of 2000 levels by 2020.
The conservative opposition, which opinion polls put on
track to win an election in two years, said it would dismantle
the tax if victorious and replace it with an alternative that
did not explicitly price carbon.
"We can repeal the tax, we will repeal the tax, we must
repeal the tax. This is a pledge in blood. This tax will go,"
opposition leader Tony Abbott said.
Business and mining groups vigorously oppose the carbon
scheme, arguing it will close coal mines, cost thousands of
jobs, hike power bills and damage Australia's international
"The carbon tax will undermine the competitiveness of
Australian coal mines with no reduction in the amount of global
greenhouse gas emissions from coal mining," Australian Coal
Association chairman John Pegler said.
The Minerals Council, which represents big mining companies
such as BHP Billiton and Rio Tinto , said the
vote was a retrograde step which would undermine export
competitiveness and cost the mining sector A$25 billion by 2020.
But environment groups welcomed the parliamentary vote and
urged the Senate to deal with the bills as soon as possible.
"Today's vote is historic for the millions of Australians
who, in the face of well-funded scare campaigns, have tirelessly
urged successive Australian governments to take action on
climate change," Australian Conservation Foundation chief
executive Don Henry told reporters.
INITIAL A$23 A TONNE CARBON PRICE
The bills set an initial carbon price of A$23 a tonne, and
guarantees billions of dollars of compensation for big business
and households, which will face higher electricity prices.
Export-exposed industries such as aluminium smelters and
steel makers will receive up to 94.5 percent of carbon permits
for free, while liquefied natural gas projects will receive
effective assistance for 50 percent of emissions.
The scheme sets up a A$10 billion clean energy finance fund
to leverage private investment in renewable energy. Legislation
for the fund will be introduced in early 2012. The scheme also
sets aside A$1.3 billion to help coal mines reduce emissions.
The plan also includes an extra A$300 million to help the
steel industry, which is struggling with a high Australian
dollar and higher costs for raw materials.
The scheme will also allow the government to buy-back up to
2,000 megawatts of electricity from Australia's dirtiest
coal-fired power stations by 2020, encouraging new investment in
renewable energy and gas-fired power plants.
Agriculture is exempt from the carbon price, although
farmers will be able to cash in on the market for carbon