Australia's Wong rejects carbon trade changes

CANBERRA, Aug 3 (Reuters) - Australian laws for carbon trading are set to be defeated in parliament's upper house Senate next week after Climate Change Minister Penny Wong on Monday rejected nine proposed opposition amendments.

Prime Minister Kevin Rudd, who remains well ahead in opinion polls, could have the trigger for an early election in the first few months of 2010 if the opposition continues to block his carbon laws. The next election is due in late 2010.

The government needs seven more votes to pass the package of 11 bills through the Senate, with the first vote set for Aug. 13, but Wong made it clear the government would not negotiate any of the nine areas proposed by opposition leader Malcolm Turnbull.

"Each of Mr Turnbull's wilted fig leaves represent a vague and open-ended demand," Wong said in a speech to a climate forum in Canberra, adding the proposed changes lacked credibility.

Carbon trading is due to start in July 2011, but Rudd wants the laws, and an Australia emissions reduction target of up to 25 percent on 2000 levels by 2020, locked in before global climate talks in Copenhagen in December.

Turnbull, who is struggling in the polls and who is keen to avoid an early election, has said he would be willing to discuss amendments later in the year to help the laws pass the Senate. [ID:nSYD300248]

Turnbull's climate spokesman Andrew Robb on Monday said the government's approach and refusal to discuss amendments to the carbon trade laws was bad for democracy.

"It has been an exercise in take it or leave it by the Rudd government. No dissent has been tolerated," Robb said.

Meanwhile, Wong played down calls for more compensation for Australia's electricity generators, and for the coal industry, under the carbon trade laws, despite complaints from the New South Wales state Labor government.

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.

Media reports have said the government is considering doubling the compensation to the coal industry. [ID:nSYD536364].

But Wong said the government stood by its plan for almost A$4 billion ($3.35 billion) in industry assistance for electricity generators, and A$750 million for the coal industry, under the carbon trade laws.

"We think that is a reasonable amount of assistance, and we put that in place after going through an extensive consultation process with the community and with industry," she said. ($1=A$1.20)

Editing by Jeremy Laurence