By James Grubel
CANBERRA, April 30 (Reuters) - Australia's conservative opposition hardened its stance against plans for carbon emissions trading on Thursday, increasing pressure on the government to soften the scheme's impact or risk parliamentary defeat.
Opposition emissions trading spokesman Andrew Robb released an independent report which he said confirmed the carbon trade scheme was being rushed in ahead of a looming recession, and would cost jobs and uncertainty over the next 20 years.
The government wants carbon trading to start in July 2010, with the laws passed by parliament by the end of June this year. Prime Minister Kevin Rudd stood by the timetable on Thursday.
"Our job is to punch this through. It is going to be tough, it is going to be hard. The alternative is to do nothing," Rudd told reporters in Hobart, capital of Tasmania state. "We will continue to push hard through the Senate."
But the government is struggling to secure enough votes in the Senate, where conservative opposition parties form the largest voting bloc, leaving the government to negotiate with five Greens and two independents to pass its laws.
The Greens are also strongly opposed to the carbon trade laws because they want the government to make deeper emissions cuts than the five percent cut promised by 2020, based on year 2000 levels.
Robb said the latest independent analysis of the carbon scheme, compiled by David Pearce from the Centre for International Economics, confirmed the government needed to do more work on the economic impact of the carbon trade scheme.
"If passed in its current form, the biggest deliberate structural change in our history would be more a product of blind faith and pigheadedness than rigorous analysis," Robb said.
JOBS, WAGES TO BE CUT
The Pearce report said the carbon plan would cost jobs in the short term and lead to lower real wages in the long term. It also found the government needed to do further analysis of the risks and transitional costs of carbon trading.
"While this may involve some delay in implementing the policy, ultimately the only sensible starting time is when the policy is ready in the full sense of the word," Pearce said.
Big business and opposition parties have called for the scheme to be delayed due to the added costs it will impose on companies already suffering during the global financial crisis.
But Pearce told Reuters he didn't expect the government would need a long delay to carry out the extra economic analysis.
"It's a really a matter of looking at some of these key elements of the design and then test to see if there's a better way of doing it," he said. "And if there is, why wouldn't you do it? If there isn't, that just gives confidence to move forward."
In its current form, Australia's carbon trade scheme will be the world's broadest, covering 75 percent of emissions from about 1,000 of the country's largest polluters. Australia, the world's biggest coal exporter and a growing supplier of liquefied natural gas (LNG), accounts for 1.5 percent of global carbon emissions but is one of the highest per-capita polluters. Coal is used for 80 percent of Australian electricity.
Companies will have to buy permits for every tonne of carbon they produce, producing a market for carbon and an incentive for companies to curb emissions.
But major trade-exposed emitters, likely to include aluminium smelters and iron and steel makers and LNG producers, will be allocated most of their permits for free. (Additional reporting by David Fogarty; Editing by David Fogarty)