Sept. 14 (Bloomberg) -- Australian Prime Minister Julia Gillard has tasked Greg Combet, the former union leader and coal mining engineer sworn in as climate change minister today, with leading an effort to impose a price on carbon emissions.
Gillard, who held on to power after gaining support from the Greens Party and three independents, appointed Combet to her cabinet on Sept. 11. Combet, previously an assistant to Penny Wong in the portfolio, takes the job as the world’s biggest coal exporter seeks to curb greenhouse gas emissions.
“The government is maintaining in the role someone who has detailed expertise in the climate change area,” Martijn Wilder, a partner at Baker & McKenzie in Sydney and head of the law firm’s climate change practice, said by phone today. “It shows they are quite serious,” he said. “He’s regarded as a very, very good negotiator, and if they go back down the route of negotiating an outcome, he will be the person to do that.”
Gillard replaced Kevin Rudd in June following a slide in the former prime minister’s approval ratings and pledged to restart a campaign to tackle climate change. Combet took over a housing-insulation program in February amid accusations by opposition leader Tony Abbott that then Environment Minister Peter Garrett had bungled it.
Combet, 52, led the Australian Council of Trade Unions from 1999 to 2007, overseeing a campaign that won a settlement for James Hardie Industries SE asbestos victims and successfully fighting employment laws introduced by the government of former Prime Minister John Howard, according to his website. He didn’t respond to requests to be interviewed for this story.
The Greens garnered a record number of votes in the Aug. 21 election after the ruling Labor Party shelved the cap-and-trade plans until after 2012. Rudd delayed the proposal amid lawmaker opposition and a lack of action by other countries.
Gillard, Australia’s first female prime minister, won support from the Greens Party in exchange for agreeing to establish a climate change committee to move toward introducing a penalty for carbon emissions. Australia’s closest election in 70 years left Gillard and Abbott competing to woo lawmakers and gain a majority.
The chances of getting a carbon price through parliament have increased after the surge in voter support for the Greens, John Mikler, a researcher at the University of Sydney who specializes in climate change, said by phone.
“It’s more positive than it’s looked in a long time,” he said. “There are obvious similarities in the concerns faced by members of parliament representing rural constituents and the Greens. This issue is really going to affect rural areas.”
It’s not yet clear whether the government will pursue a carbon tax or an emissions-trading system like the one proposed in its previous carbon pollution reduction scheme, Baker & McKenzie’s Wilder said.
“A significant number of people who voted for the Greens did so because the Labor Party abandoned the CPRS, and the political message now is quite clear -- the government has to be pursuing a price on carbon,” Wilder said.
Christine Milne, the deputy leader of the Greens, said Combet has a “can-do attitude” that will help in climate-change talks.
“While there are obviously policy differences between our two parties, particularly the urgency of action and the depth of emissions cuts needed, I look forward to working with him to develop a credible policy response,” Milne said today.
While many Australian businesses want the certainty a carbon price would provide, Combet faces a difficult task in convincing all sides of the debate, Mikler said.
“The main challenge is to reconcile interests,” he said. “You have industries that are going to have to change and face the burden of increased costs. They are the coal industry, the coal-fired power stations, the constituencies where these are important issues, and given that the government is a minority government, holding on to seats is going to be important.”
Combet, a Sydney native, was elected in 2007 in the New South Wales seat of Charlton, where coal mining is one of the main industries. In June 2009, he became minister for defense personnel, materiel and science and was selected to assist Wong, who is finance minister in the new Cabinet sworn in today.
By appointing Combet, Gillard was placing a “crucial portfolio in a safe pair of hands,” said Kobad Bhavnagri, a Sydney-based analyst for Bloomberg New Energy Finance. Even so, Combet faces the challenge of balancing some protection of coal miners and jobs with objections from the Greens to high levels of industry compensation.
“A possible outcome will be to exclude coal mining from an emissions trading scheme, but balance this with higher national targets,” Bhavnagri said. “The issue of coal mining is likely to be one of the most difficult to resolve,” he said. “A palatable resolution will be essential for carbon pricing legislation to pass the parliament.”
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