September 27, 2010 / 7:27 AM / 7 years ago

No carbon price in sight for Australia before 2012

SYDNEY, Sept 27 (Reuters) - Australia will not put a price on carbon emissions until at least 2012, after Prime Minister Julia Gillard announced that a committee examining the issue would not finish its deliberations until end-2011.

Australia, one of the worst per-capita greenhouse gas polluters, is reviewing its policy to tackle climate change after elections last month left the ruling Labor party relying on a Greens MP and three independents to retain power.

The multi-party committee will meet monthly from October 2010, producing confidential papers to the government until cabinet makes a decision, Gillard said on Monday.

“It’s envisaged that the committee will work through to the end of 2011 when there will be a consideration at that time about the further need for the committee to continue,” Gillard told a news conference in Canberra.

“The global economy has already begun to shift to a low carbon economy and if we fail to act on a price on carbon pollution we ... run a risk of falling behind,” she said.

Australia is the world’s largest coal exporter and its economy is heavily reliant on coal-fired power. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For a factbox on Australia’s CO2 footprint, [ID:nSGE67G075] For a Q+A on why Australia needs a CO2 price [ID:nSGE6640C0] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

After twice failing to push a carbon-emissions trading scheme through the last parliament, the Labor government is now seeking an industry and community consensus for a carbon price.

Gillard has left open the option of imposing an interim carbon tax ahead of a full market-based scheme.

But reaching agreement within the committee itself may be difficult, with Labor and the Greens party differing on targets for reductions in greenhouse emissions.

Labor proposes a five percent cut from 2000 levels by 2020 and is open to raising this target to 25 percent if it is matched by global action of an equivalent measure.

The Greens favour even larger cuts and have already proposed a $23-a-tonne carbon tax on big polluters as in interim measure.

“Both the government and the Greens retain a different view about the emissions reduction target,” Climate Change Minister Greg Combet told the news conference.

“What we have committed to do here is to examine ways in which a carbon price could be introduced into the economy to start the important work of reducing emissions,” he said.

From mid-2011, the Greens party will control the upper house Senate, making it easier for Labor to pass carbon price laws if it can reach agreement with the Greens and also get support from its three independent MP backers.

Miners and energy firms had opposed Labor’s original carbon-trading scheme, but some key industry leaders are now calling for a carbon price, saying it would be preferable to the policy uncertainty plaguing sectors such as the power industry.

The uncertainty has hindered financing and investment plans for power generators. Companies affected include AGL Energy AGK.AX; TruEnergy, a unit of Hong Kong-listed CLP Holdings (0002.HK); and Britain’s International Power IP.L, which has a stake in an Australian coal-fired power station.

AGL and electricity provider Origin Energy (ORG.AX) have repeatedly called for clarity on carbon pricing as they look to invest billions of dollars in energy infrastructure.

Miners BHP Billiton (BHP.AX) and Fortescue Metals (FMG.AX) have also both called for a carbon tax over emissions trading. (Reporting by Michael Perry; Editing by Mark Bendeich)

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