Australia Sticks by Plan to Reintroduce Carbon Bill (Update1)

Dec. 30 (Bloomberg) -- Australia’s government will stick by plans to reintroduce legislation in February to create a national carbon emissions trading system after the bill was rejected by the Senate earlier this month.

“The parliament meets at the beginning of February and we will be putting the legislation again to the parliament,” Finance Minister Lindsay Tanner told reporters in Melbourne today. “That commitment stands.”

The government plan, employing carbon trading similar to that used in Europe, would raise average annual household costs by A$624 ($556) and make services such as electricity more expensive, Tanner said today, citing Treasury data. Opposition leader Tony Abbott, who took the role one day before the Senate rejected the bill, argues the proposal will raise costs by A$1,100 without mitigating climate change.

“The rise in electricity prices will create an incentive for people to switch to other forms of power,” Tanner said today. “The purpose to the scheme though is to put pressure on households to conserve electricity.”

Australia, the world’s biggest coal exporter, proposes to introduce carbon trading by 2011 to reduce its greenhouse gases by 5 percent to 15 percent of 2000 levels in the next decade, according to the proposed laws.

While the U.S. is the biggest greenhouse-gas producer among developed nations, Australia has overtaken it as the biggest per-person emitter of carbon dioxide, British risk analysis firm Maplecroft said Sept. 9.

Senators voted 41 to 33 against the bill, the second time in three months it failed to make it through the upper house.

Its rejection gave Prime Minister Kevin Rudd a possible trigger to call an election through a double dissolution, a procedure under the Australian constitution to resolve deadlocks between the Senate and the House of Representatives.

While the Labor government has a majority in the nation’s lower house, neither it nor the opposition Liberal-National party coalition control the Senate, with both sides needing the support of other parties to pass or block legislation.

To contact the reporter on this story: Robert Fenner in Melbourne rfenner@bloomberg.net

To contact the editor responsible for this story: Iain Wilson at iwilson2@bloomberg.net