Opposition grows to Australia’s CO2 trade scheme

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CANBERRA, March 16 (Reuters) - Major political opponents to Australia’s carbon trading plans hardened their stance on Monday, adding pressure on the government to make radical changes to get the scheme passed by parliament.

The ruling Labor party needs either the support of two independent and five Greens senators or the main opposition Liberal party to pass the emissions trading laws in the Senate.

But all three have stepped up their opposition, saying it cannot be passed by parliament in its current form. The government unveiled the draft emissions trading laws last week.

Independent Senator Nick Xenophon, one of the seven swing-vote senators the government needs to support the laws, said the emissions trading scheme (ETS) had no backing outside Labor.

“It should be pretty clear to the government now that in its current form this legislation won’t pass the Senate,” Xenophon told reporters.

Xenophon in February almost killed the government’s A$42 billion ($27 billion) stimulus package, aimed at staving off recession, by initially voting down the package and only backing it after extracting changes.

The Australian Greens, who have five balance-of-power votes, and the major opposition conservative party, also said they would not support the scheme, which aims to slash emissions in Australia’s energy-reliant economy from mid-2010.

“Green it up with the Greens or brown it down with the (opposition) coalition,” Greens Senator Christine Milne said, warning the government faced stark choices to win support.

Climate Change Minister Penny Wong last week unveiled draft laws underpinning the ETS and targeting cuts of between five and 15 percent of 2000 levels by 2020.

RECESSION

But the Greens want cuts of 40 percent and 100 percent of emissions permits auctioned, while conservative opposition leader Malcolm Turnbull said he opposed the laws because they would cost jobs as Australia teeters on the edge of recession.

The range of opponents to the scheme and the gulf between their competing demands means the government and its chief negotiator Wong face a near-herculean task to win Senate support.

“It’s literally completely friendless,” Turnbull told state radio on Monday, demanding Prime Minister Kevin Rudd and Wong wait for the outcome of global talks on a post-Kyoto climate pact in Copenhagen later this year.

The Greens and the conservatives, in an unlikely alliance of opposites, banded together last week to establish a two-month inquiry into the scheme, saying they would not support it without major changes.

Under the current legislation, the scheme will be the world’s broadest, covering 75 percent of emissions. Around 1,000 of the largest polluters, from transport operators and aluminium makers to gas producers and refineries, will have to pay to pollute.

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The laws will be introduced to parliament in May and the government wants them passed by the end of June in time to meet its timetable to start trade from July 2010.

Australia, the world’s biggest coal exporter and a growing supplier of LNG, accounts for 1.5 percent of global carbon emissions but is one of the highest per-capita polluters, with 80 percent of electricity from coal-fired power stations. ($1 = A$1.53)