CANBERRA – Australia has suspended plans for an ambitious carbon emissions trade scheme for at least three years due to parliamentary opposition and slow progress on a global climate pact, prime minister Kevin Rudd said yesterday.
The decision bows to the political reality that a hostile upper house Senate, where the government is seven votes short of a majority, is refusing to pass the scheme. It has been rejected twice and a third rebuff is expected in weeks.
The promise of an emissions scheme helped propel Mr Rudd to power in 2007 but public support has slipped, with another election due this year.
Mr Rudd, who leads in opinion polls, said the government would wait until the expiry of the Kyoto pact in 2012 before pushing on with plans for one of the world’s most comprehensive regimes.
“That will provide the Australian government at the time with a better position to assess the level of global action on climate change,” Mr Rudd told journalists in Sydney.
Under the reforms, full trading of emission permits was to have begun in 2012, but uncertainty over whether this would actually happen meant very few traders dared to move contracts for that year. That uncertainty appeared to fade on Tuesday as markets digested news there would be no trade in 2012, sparking a fall in prices.
Mr Rudd’s centre-left Labor Party will now take its carbon plan off the table, with the scheme to start in 2013 at the earliest.
Conservative opposition treasury spokesman Joe Hockey said delaying the scheme made a mockery of Mr Rudd’s pledge that climate change was the “great moral and economic challenge of our time”.
The plan to cut carbon output has split the opposition, leading to the resignation of Liberal leader Malcolm Turnbull, who staked his position on a deal struck with Mr Rudd to support the climate-change bill.
Support for Mr Rudd, who must call a general election within a year, declined two percentage points to 54 per cent, according to an April 20th poll published by the Australian newspaper.
Tony Abbott, the new opposition leader, saw backing for his coalition rise a similar amount to 46 per cent, according to the survey. – (Reuters, Bloomberg)