CANBERRA, April 27 (Reuters) - Australia's government has shelved plans for an emissions trading scheme for at least three years due to strong opposition in parliament and falling election-year support, local media said on Tuesday.
The government had decided not to start the scheme until 2013 at the earliest, taking it beyond this year's election and shaving A$2.5 billion ($2.3 billion) in compensation for the emissions regime from the May 11 budget, Fairfax newspapers and ABC radio said, quoting sources.
Resources Minister Martin Ferguson refused to confirm the reports, but said the government was still committed to fighting climate change, which Prime Minister Kevin Rudd called "the greatest moral challenge of our generation".
"The issue of health care is going to occupy a lot of people's minds, I might also say, so is the question of economic management. Even if we don't get a price on carbon there's still a lot to be done," Ferguson told Australian radio.
The government had planned to cut Australia's carbon emissions by 5 percent by 2020, forcing 1,000 large company emitters to buy permits to pollute from July 2011.
But the plan, which capped carbon emissions at A$10 a tonne for first year and channeled compensation to energy and trade-exposed industries like AGL Energy , BlueScope steel and OneSteel , has been twice rejected in the upper house of parliament and faced a third defeat within weeks.
The government decided last week to cut the scheme from the May 11 national budget, bowing to the political reality that a hostile Senate was refusing to pass it, Fairfax newspapers said.
The decision means Rudd's Labor will take its emissions legislation off the table until after elections late this year, which polls have Rudd on course to win.
A spokeswoman for Climate Change Minister Penny Wong said the government remained committed to the emissions scheme, or CPRS, as the best way for Australia to reduce its carbon pollution levels, which are the world's highest on a per capita basis.
"The blocking of the CPRS legislation by the opposition has caused delays and created uncertainties which will of course affect the budget treatment of the CPRS," the spokeswoman said.
The Australian Greens, who control five of seven Senate crossbench votes the government needs to pass legislation, said the decision to abandon the emissions scheme meant the government should look at interim alternatives like a levy on polluters.
"In the face of ever stronger warnings from scientists, the government must not throw the baby out with the bathwater and abandon any plans to put a price on carbon," Greens Deputy Leader Christine Milne said.
The shelving of the scheme comes as a survey conducted by Auspoll for the Climate Institute and the Conservation Foundation found voter concern about global warming had slipped 9 percent since May last year, but was still strong at 68 percent.
Just 36 percent of voters believed Rudd was the best person to handle climate issues, a fall of 10 per cent from February last year, while 40 percent said there was no difference between the government and opposition conservatives.
"About two-thirds of Australians are concerned over climate change. We think that the parties that take stronger action on climate change will be rewarded at the next poll," said Climate Institute chief executive John Connor.
Reuters.
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