Following five weeks of intense negotiations between the Rudd government and the Opposition, the Australian Senate voted once more, by 41 to 33, against bills that would have established the Carbon Pollution Reduction Scheme (CPRS). The Greens, Independent Senator Nick Xenophon, and Family First Senator Steve Fielding joined the Opposition (Liberals + Nationals) in voting down the scheme (SMH 02/12/09).

 The Minerals Council of Australia and the Australian Chamber of Commerce and Industry welcomed the rejection, while WWF and the Climate Institute, called for a double dissolution and joint sitting of Parliament to get the original bills through (SMH 04/12/09).

 Under Australia’s bicameral parliamentary system, both houses must reach majority agreement on proposed legislation before it can go forward into law. Following a vote against a bill it may, however, subsequently be revived or presented again. That is what happened this autumn following a first rejection of the CPRS by the Australian Senate in August (see my previous post). The legislation had been put on the table again by the government in November, passing without surprise the House of Representative on the 17^th.

 The Senate no vote came after an extraordinary few weeks of drama, in which the Opposition reached a deal to support the legislation with big changes, and then reneged after its change of leadership. Indeed, on Monday, former Opposition leader Malcolm Turnbull (who was backing the passage of the Australian ETS) was challenged within its own party, and was ousted as Liberal party leader by right-wing climate skeptic Tony Abbott. The new Liberal leader, who has been portraying the scheme as Kevin Rudd’s “big new tax”, managed to convince most Liberal Senators who would have supported the CPRS to vote down the scheme (except for two who crossed to floor).

 Mr Abbott insists that he will have a credible climate change policy but is making it clear that his policy will not include an emissions trading scheme any time soon. In particular, he said it would be “folly” for Australia to establish an emissions trading scheme before the United States had settled on its model: “The right time for an emissions trading scheme is when the rest of the world is signed up for one.” (ABC 02/10/09). Abbott plans to fight a climate change election using land management and energy efficiency measures instead of an ETS, and would welcome a debate on nuclear power as an option.

 Despite the fact that Prime minister Rudd now has the option to call for a double dissolution election, which he would without a doubt win, he has played down prospects of pulling this trigger. The government has said that in the next Parliamentary sitting period commencing on 2 February 2010, it will introduce bills to establish the CPRS, inclusive of amendments incorporated following negotiations with the Opposition announced on 24 November 2009, to give Parliament a further opportunity to consider and pass legislation. Hopes to portray Australia as a world leader on the issue have now vanished, putting Kevin Rudd in an incomfortable position as a friend of the chair in Copenhagen next week.

After the Government’s Carbon Pollution Reduction Scheme’s defeat in Senate last August, the Australian Opposition, the Coalition (Liberals + Nationals), had until last Sunday to propose amendments before the reintroduction of the bill in November (for previous developments, see here). After a Party meeting lasting more than four hours yesterday, Mr. Turnbull, the Opposition leader, confirmed the partyroom had endorsed his strategy, backing “commonsense amendments” which, if agreed to, “would save thousands of Australian jobs”(The Australian 19/10/09).

Most provisions intend to provide greater exemptions to key industries. Amendments include exemptions for the coal industry, greater assistance to power generators, a permanent exemption for agriculture, greater exemptions for energy intensive industries, and protection for food processing. The detailed list is available on the Liberals’ website. The Coalition won early support for its position last night, with the Minerals Council of Australia backing its amendments. “The proposed amendments will better align the CPRS with other emissions trading schemes around the world, promote investment in low-emissions technologies and provide the necessary flexibility to adjust to the outcome of the United Nations climate change talks in Copenhagen in December,” chief executive officer Mitchell Hooke said. (SMH 20/10/09)

Prime Minister Kevin Rudd, set a six-week timetable for negotiation and debate before a vote in November. The bill will be introduced to the House of Representatives this week, and should reach the Senate by mid-November. The government will push very hard for the passage of the bill by Copenhagen and may extend Senate sittings if necessary (SMH 18/10/09). However, the Nationals and some key Liberals strongly oppose the ETS, and threaten to cross the floor if Mr. Turnbull strikes a deal with the government. The legislation might still pass under this scenario, but Mr. Turnbull will face the embarrassment of a Coalition split on the issue just weeks after declaring he would stake his leadership on success.

The Australian domestic climate surrounding the emission trading scheme issue contrasts with the confidence and dynamism demonstrated by Labour Prime minister Kevin Rudd in multilateral talks. Mr Rudd was in New York late September to advance international negotiations on strategies to cut greenhouse gas emissions ahead of the December Copenhagen summit. He met Bill Clinton to discuss climate change and positioned Australia as a middle-power honest broker that can help smooth the way between the two superpowers, the US and China, which hold the key to a successful agreement in Copenhagen. Discussing tactics with UN Secretary-General, Ban Ki Moon, the latter asked Mr Rudd to chair a meeting at the climate talks – a significant role which recognises the contribution Australia has made so far to the global effort to strike a deal (SMH 21/09/09).

Nevertheless, back home, the Opposition (the Coalition of Liberals and Nationals), is trying to delay as much as possible the adoption of ETS legislation. As previously explained on this blog here and here, Rudd’s Carbon Pollution Reduction Scheme (CPRS) was defeated by the Senate in August. The legislation is due to be reintroduced in Parliament in November and the Opposition had been given until October 19th to present amendments.

But the Opposition leader, the Liberal Malcom Turnbull, is struggling to control the disunity among Coalition members. Increasing the pressure on their leader, many Coalition MPs are urging not to cut a deal with the government before the December meeting in Copenhagen. The Coalition argues that there might not be time to debate the legislation before the end of this parliamentary year. But in reality, it wants to wait and see what other countries will commit to. During a shadow cabinet meeting held last week, tactics were discussed and Turnbull desperately tried to unify his colleagues in favour of negotiations with the government. But opponents like Senator Mason have been arguing that to pass climate legislation before Copenhagen would “risk Australian jobs and Australia’s standard of living for negligible environmental benefit” (CourrierMail 06/10/09). Some Opposition members have charged that the rationale of the shadow cabinet for backing a pre-Copenhagen climate deal was to “avoid a double dissolution election” and the possibility of a flawed emissions trading scheme passing at a joint Parliamentary sitting (CourrierMail 06/10/09).

Mr Turnbull might actually be right to fear an election since his party has just taken another hit in the poll, the government leading by 16 points. Turnbull is now calling for a special meeting on October 18th, and hopes to get an agreement on proposed amendments to the CPRS legislation (ABC 06/10/09). Now that he has officially canvassed a split with the Nationals, who have said they will not agree to any deal with the Government over the scheme, Mr Turnbull must reduce chances of potential unrest among its own party when Parliament will resume on October 19th.