Australian carbon plan divides opposition parties13:16, Friday,...

Australian carbon plan divides opposition parties
13:16, Friday, 24 July 2009

By James Grubel

CANBERRA, July 24 (Reuters) - Australian plans for a sweeping
carbon trade scheme opened new divisions within the opposition
parties on Friday, boosting hopes Prime Minister Kevin Rudd will
win approval for his plan and avoid a possible snap election.

Rudd, who remains well ahead in the polls, could have the
option of an early election if laws to set up carbon trading
remain stalled in parliament's upper house Senate, which is
poised to reject the plan in a scheduled vote on Aug. 13.

But senior Liberal opposition lawmaker Tony Abbott on Friday
called for his conservative party to change policy and pass the
carbon trade bills to avoid an early election it could not win.

"As a general rule, oppositions should welcome elections, but
this would make it even harder to keep the focus on the Rudd
government's addition to borrowing and spending," Abbott wrote in
the Australian newspaper.

Rudd is due to face the voters in late 2010 or early 2011,
but could call a snap poll early next year if the Senate rejects
the carbon trade plan twice. Rudd's Labor needs seven extra votes
to pass laws through the obstructive Senate.

The opposition, which controls the largest Senate voting
bloc, is struggling for support in polls and would prefer a late
2010 election on the issue of government debt and economic
management, rather than fight early on climate change.

Based on current opinion polls, Rudd would easily win a
second term in office with an increased majority, while the
Liberal and National Parties would lose up to 20 seats.
[ID:nSYD508068].

Opposition leader Malcolm Turnbull has raised the possibility
of amending and passing the carbon trade laws, although he still
wants a final vote postponed until early 2010 and after
December's global climate change talks in Copenhagen.

The suggestion has angered many of Turnbull's Liberal
colleagues, who want the government plan to be defeated, and the
junior opposition National Party, which is implacably opposed to
the carbon trade scheme.



COPENHAGEN DEADLINE

Rudd wants the laws passed before the Copenhagen summit, so
Australia can go to the global talks with a commitment to cut
Greenhouse gas emissions by up to 25 percent by 2020, based on
2000 levels, if the rest of the world takes similar action.

Gary Cox, vice president of commodities at Newedge Australia,
said interest was returning to Australia's fledgling carbon
trading market on raised hopes the parliament would pass the
carbon trade legislation.

"We've had some Europeans and local people get involved in
the CER (Kyoto-backed Certified Emission Reductions) market again
for the first time since the scheme was delayed," said Cox. CERs
are traded carbon credits for emission reductions.

The market went dead in May after the government postponed
the scheme's introduction until mid-2011, Cox said, but a fresh
trade happened this week when an Australian electricity generator
unwound previously purchased December 2010 CERs.

CERs trade on the European Climate Exchange and imports will
be permitted to offset carbon emissions once the Australian
scheme is up in running.

Interest was also returning in moribund Australian Emission
Units, which are the basic unit of compliance and trade in the
planned regime, Cox said. Each unit represents one metric tonne
of carbon dioxide equivalent of greenhouse gas emissions.

Finance Minister Lindsay Tanner on Friday talked up the
option of an early election on climate change, saying a poll
could be inevitable if the Senate was too obstructionist.

"Well if enough things are getting blocked in the Senate that
is effectively making it impossible for the Government to get its
programme through, or to govern," Tanner told Australian radio.

The carbon trade scheme will cover 1,000 of Australia's
biggest companies and will put a price on carbon pollution,
giving business a financial incentive to curb emissions.

For full coverage of carbon trading in Australia and New
Zealand, double click on [ID:SYD32519]
(Additional reporting by Rob Taylor in Canberra and Bruce
Hextall in Sydney; Editing by Alex Richardson)
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Keywords: AUSTRALIA CARBON/



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