Australia steps up pressure over carbon laws

CANBERRA (Reuters) - Australia’s government stepped up pressure on a divided opposition over climate policy on Monday, saying it would only negotiate changes to controversial carbon trade laws if the amendments did not hurt the budget.

The government has been struggling to get the laws through the Senate to create only the second domestic emissions trading platform in the world after the European Union’s scheme.

Rejection by the Australian Senate in November’s next sitting could give the government an excuse to call an early election.

Emissions trading puts a price on every metric ton of planet-warming carbon dioxide emitted by industries and sets an increasingly tougher cap on those emissions over time, forcing companies to pay more to pollute or to cut emissions by becoming more efficient.

Australia’s scheme will be tougher than the European emissions trading program because it covers 75 percent of the nation’s carbon emissions, versus 40 percent in Europe. The outcome is being closely watched in the United States, where lawmakers are crafting emissions trading laws as well.

Australia’s government has made major revisions to its laws, which the Senate has already rejected once. The government is seven seats short of a majority in the Senate and support from the opposition is crucial.

Climate Change Minister Penny Wong said on Monday proposals released by the opposition had a A$3.2 billion ($2.9 billion) costing error. “What we are saying to the opposition is that you need to put forward amendments that are fiscally responsible to deal with this legislation responsibly,” Wong told Australian Broadcasting Corp. radio.

Opposition leader Malcolm Turnbull, however, said the proposals were put together by independent economic consultants, and did not represent his party’s policy.


The government aims to have carbon trading start in July 2011, but wants laws for the scheme passed ahead of December U.N. climate talks in Copenhagen meant to hammer out the framework of a tougher global climate deal.

The opposition wants to wait for the outcome of Copenhagen.

Australia, the world’s biggest coal exporter, has committed to cut carbon emissions by 5 percent by 2020, or up to 25 percent if there is a strong international agreement on a broader climate pact in Copenhagen.

Turnbull wants his party to negotiate amendments so the package can pass to avoid a snap election, which opinion polls show the government would win with an increased majority.

The opposition, which is deeply divided over the carbon-trade laws, will hold a special meeting on Sunday to consider possible amendments in what is shaping up as a major test of Turnbull’s leadership.

A new opinion poll on Monday found voters evenly split on whether the laws should pass before or after the Copenhagen talks, in a finding which could encourage rebel opposition lawmakers to harden their stand against the scheme.

Treasurer Wayne Swan said the government was serious about negotiating changes, but the opposition remained in chaos.

“It’s hard to figure out what the opposition is doing because essentially they are populated by climate change dinosaurs,” Swan told reporters.

Editing by David Fogarty