April 18, 2011 / 2:44 AM / 9 years ago

UPDATE 2-Australian carbon scheme faces growing opposition

* Carbon tax opposition swells

* Business warns of job, production losses (Updates with emissions data, factbox, graphic links)

SYDNEY, April 18 (Reuters) - Opposition to Australia’s planned carbon tax is swelling with almost 60 percent of voters against the plan and major food retailers, miners, energy and agriculture firms writing to the prime minister criticising the tax.

The Australian Food and Grocery Council said the carbon tax would increase the cost of food and grocery manufacturing, while the Business Council of Australia said it could damage the country’s export competitiveness and drive production offshore.

Forty-five mining, energy, agriculture and food firms said in a letter to Prime Minister Julia Gillard they had no capacity to pass on carbon costs, with rising input prices due to supply chain problems after floods in eastern Australia and the strong Australian dollar.

As business executives stepped up their campaign against the tax, voters are also growing increasingly hostile as they fear that the tax would raise the cost of everything from food to electricity.

A poll of 1,400 people, carried out at the end of last week and published in Fairfax newspapers on Monday, found that 59 percent of respondents opposed the plan, up 3 percentage points from the last survey in March.

On Monday, government estimates showed emissions rose 0.5 percent in 2010 over the previous year, when they dipped because of the global financial crisis.

Despite that slight dip, “significant challenges remain in all sectors to reduce our carbon pollution into the future”, Climate Change Minister Greg Combet said in a statement.

The Business Council said in a letter a carbon policy without adequate compensation for Australian industries could force production to move offshore to countries with less rigorous climate policies.

It also said a carbon tax would have limited impact on global greenhouse emissions as Australia only accounted for about 1.5 percent of emissions.

“In framing our carbon pricing policy Australia should act in tandem with international action, not ahead of it,” said Council president Graham Bradley, in a letter made public on Monday.

“To do otherwise means that important manufacturing, agricultural and resource-based businesses will be disadvantaged.”

Gillard’s Labor government, which has a one-seat majority, wants the carbon tax to start in July 2012, with a move to an emissions trading scheme three to five years later, in order to curb emissions and fight global warming.

A carbon price has yet to be set, but media reports suggest the government wants a low price of about A$20 ($21) a tonne.

Emissions-intensive exporters such as steel companies BlueScope and OneSteel and the coal industry have already raised concerns that a carbon tax would hurt their international competitiveness and cost thousands of jobs.

Trade unions, traditional supporters of the Labor party, have also voiced growing concern at the tax, warning they would not tolerate job losses. (Reporting by Mark Bendeich; Editing by David Fogarty and Robert Birsel)

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