Australia’s conservative lawmakers holding the largest block of votes in the Senate joined with Greens and independents to defeat the Carbon Pollution Reduction Scheme set to start in July, 2011. The scheme, the most ambitious in the world, aimed to cut emissions in the biggest per-capita emitter in the developed world.
Greens wanted tougher emissions targets, while conservative opponents are divided on the need for a scheme and want it delayed until after Copenhagen. Many opponents fear Australia will be disadvantaged if other nations fail to act on climate change.
Major industrial emitters, however, are so fearful of months more uncertainty over the scheme's A$12 billion (6 billion pound) estimated cost, that the country’s second-largest power retailer warned of a possible energy supply crisis if the government does not come up with a speedy resolution.
In a statement, Origin Energy said: "The ongoing uncertainty surrounding the [carbon-reduction] legislation is delaying both the investment necessary to meet Australia's long-term baseload electricity needs and the investment in lower-carbon technology required to gradually reduce Australia's emissions."
But the Australian government renewed its promise to push through the scheme before the UN meeting in Copenhagen, where the world’s policy makers will try to agree a broad global climate pact. Canberra is eager to take a leading role.
"This bill may be going down today, but this is not the end," climate change minister Penny Wong told the Senate. "We will bring this bill back before the end of the year because if we don't this nation goes to Copenhagen with no means to deliver our targets."
Prime Minister Kevin Rudd told parliament that the defeat of his emissions trading plan had "put Australia's future on climate change in grave jeopardy." Scientists say Australia, the world's driest continent and prone to drought, faces a rapid rate of climate warming.
Australia's scheme is similar, but broader in scope, to one introduced in Europe four years ago – the European Trading Scheme - which requires big industrial polluters to buy permits for producing carbon dioxide, or sell them if they invest in clean technology reducing emissions.
The proposed Australian scheme means that about 1,000 of the country’s top polluting companies would have to buy CO2 permits, covering 75% of national emissions.
Australia is the world's biggest coal exporter, and relies on coal for about 80 percent of electricity generation, prompting industry warnings some coal mines and coal-fired power stations will be forced to close under the carbon-trade regime.
