Monday, March 16, 2009

Emission trading scheme stalls

Plans for emissions trading have hit a brick wall after a majority of senators said they would vote against the government's scheme.

The opposition and independent Senator Nick Xenophon say they will not support the emissions trading scheme (ETS) in its current form, leaving the government without enough votes to pass it.

This casts doubt on whether the scheme can start by July 2010, as the government promised.

Opposition leader Malcolm Turnbull has hardened his opposition to the scheme in recent days and Senator Xenophon is no fan of the ETS.

"So it should be pretty clear to the government now that in its current form this legislation won't pass the Senate," Senator Xenophon said on Monday.

The Australian Greens have indicated they are unlikely to support the scheme unless it is greened up.

In question time on Monday, Mr Turnbull focused on the jobs that could be lost if the scheme was not properly thought through.

He said coal giant Xstrata estimated the ETS would cost 1,000 jobs and up to $7 billion in investment.

"What does the prime minister say to the 1,000 working families he is turning into redundancy families?" Mr Turnbull said.

Opposition emissions trading spokesman Andrew Robb said aluminium company Alcoa had warned 1,800 jobs could go overseas.

Mr Rudd hit back at the criticism and said it was right to tackle climate change.

He poured scorn on Mr Turnbull's new stance, saying he used to be an advocate of emissions trading.

The opposition was all "flip, flop, flap on climate change policy", Mr Rudd told parliament.

He ran into trouble when he said Xstrata would qualify for a particular kind of compensation under the ETS.

Xstrata's coal operations will not qualify for that compensation and Mr Turnbull pounced on the error.

"If the prime minister does not understand his own ETS ... who does understand the scheme?" Mr Turnbull said.

The opposition's new climate policy, revealed by Mr Turnbull at the weekend, is to delay emissions trading until 2012.

No scheme should be developed until after United Nations climate talks at the end of this year, the opposition says.

They have vowed to vote against the government's scheme.

Labor does not have a majority in the Senate, so needs the support of the Australian Greens and both crossbench senators to get the ETS passed if the opposition votes against it.

The economic crisis has fuelled opposition to emissions trading, with critics saying now is not the time to put an extra levy on business.


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