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Australian PM moves closer to carbon trade deal

(Agencies)
Updated: 2009-11-16 16:45

CANBERRA: Australian Prime Minister Kevin Rudd moved closer to securing his carbon trade laws on Monday after the government agreed to exclude farmers from the scheme, but warned opponents time was running out to strike a deal.

The government hopes the troubled scheme will finally pass the Senate before the end of this month and become only the second national emissions trading platform outside Europe and, possibly, a template for other countries.

The package of 11 bills passed the first stage of parliament in the lower House of Representatives on Monday, where the government has a majority.

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But the government needs 7 votes in the hostile Senate and has been negotiating with the opposition on amendments to secure the support it needs.

Much is at stake. The Senate has already voted against the laws, in August, and the government has put its reputation at stake by backing carbon trading as a major way to curb carbon emissions is one of the world's top per-capita CO2 polluters.

Rudd also wants the laws to pass ahead of a major UN climate meeting in Copenhagen next month, where the prime minister has been given a special guiding role.

Analysts said excluding agriculture should help the scheme pass, although opposition lawmakers demanded more concessions in return for their votes.

"It boosts the chance of it passing," Rupert Posner, Australia director for think tank The Climate Group told Reuters. "It certainly provides the farming sector the benefits without any of the costs."

Under the scheme, carbon trading would start in July 2011, giving business a financial incentive to curb emissions by putting a price on planet-warming carbon dioxide pollution. Companies will need a permit for every tonne of CO2 they emit.

The opposition wants agriculture excluded, more free permits for emissions-intensive export industries, more protection for coal companies by excluding fugitive emissions - the gas produced naturally when coal is mined.

Under Rudd's scheme, agriculture was already exempt until at least 2015. Agriculture accounts for about 16 percent of overall emissions.

The government wants the laws passed by November 26, when the Senate is due to adjourn for the year, and ahead of the climate talks in Copenhagen.

Opposition leader Malcolm Turnbull, who is seeking a deal to avoid the threat of an early election on climate change, refused to say if both sides were any closer to an agreement.

"Obviously time is marching on," Turnbull told reporters. "The negotiations are proceeding, they will have a conclusion. When we get to a conclusion, we'll decide how we're going to vote."

Rudd said it was time for the opposition to strike a deal, saying the government would extend Senate sittings beyond November 26 if the opposition needed more time to debate the package.

"The clock is ticking for the planet, it is ticking for Australia and it is also ticking for this parliament," Rudd said. "The time has come to act."

The latest developments came after 19 Asia-Pacific leaders on Sunday said it was unlikely the Copenhagen summit would agree to a tough, legally binding UN climate deal to replace or expand the Kyoto Protocol.

US President Barack Obama and several other Asia-Pacific Economic Cooperation members decided to aim for a strong political agreement on how to fight climate change and work on sealing a legally binding agreement in 2010, or later.

Progress of the scheme, designed to cover 75 percent of Australian emissions from 1,000 companies or operations, is being closely watched overseas, particularly in the United States where lawmakers are debating their own proposals.