The coal industry, electricity generators and farmers are the big winners from an emissions trading deal struck between the Rudd government and the opposition leadership.
As expected, agriculture has been excluded from the government’s carbon pollution reduction scheme, the coal industry will get $1.5 billion over the next five years and total assistance to electricity generators will be worth $7.3 billion.
"This no doubt makes it easier for some of those large companies, but in the end those costs will be passed on to the consumer one way or the other,’’ said Rupert Posner, Australia director of The Climate Group.
"Overall, the most important thing is that we get the legislation passed this week so the prime minister can go to Copenhagen with legislation for the introduction of the emissions trading scheme. We need the momentum before Copenhagen, not after.’’
But the ultimate fate of the deal, nutted out between the coalition’s chief climate change negotiator Ian Macfarlane and Climate Change Minister Penny Wong, still hangs in the balance.
Shadow cabinet ticked off on the agreement at a meeting this morning but the joint coalition party room is still considering the deal.
The meeting will be a major test of Opposition Leader Malcolm Turnbull’s authority with the Nationals flagging their opposition to any deal and up to a third of Liberal politicians suggesting they could oppose it.
Prime Minister Kevin Rudd and Senator Wong said today the package, which will cost the budget an extra $204 million over the next four years, was ‘‘fiscally responsible’’.
It includes extra expenditure of $1.28 billion over the next four years but this will be offset by cuts to the package for households, which will shave $910 million from the cost.
But Mr Rudd denies poor families will be worse off from the changes.
‘‘We don’t intend with our families and in particular low-income families to shoulder the pain of the adjustment,’’ he told reporters. ‘‘This has to be done equitably across the entire economy.’’
A transitional electricity cost assistance program of $1.1 billion will be established to assist medium and large manufacturing and mining businesses with scheme-related increases in electricity prices.
Agricultural emissions will be excluded from the scheme and offsets for agricultural emissions abatement will be included.
Voluntary action by households will now allow Australia to go beyond its 2020 emissions reduction target.
The scheme will be amended to ensure that all existing and future purchases of GreenPower will be counted.
If they pass the Senate, Mr Rudd hopes to play a prominent role in negotiating a new global climate treaty at a summit in Copenhagen next month. Senate approval would mean Australia backing what would be only the second domestic emissions trading scheme outside of Europe to pass into law.
The United States and New Zealand, which are also trying to pass carbon trading laws, are eyeing developments in Australia closely.
Mr Rudd's revised scheme still remains far from assured as opposition parties are deeply divided over it, with some conservatives vowing to vote against the laws regardless of the deal and some moving to delay the vote until February 2010.
If the laws are again rejected by a hostile Senate after a failed August vote, Mr Rudd would have a trigger for a snap election on climate change.
"A vote on the bill must be held before parliament rises this week. Passing the CPRS this week will give Australian businesses the certainty they need to make investments," Mr Rudd said.
"It will also mean Australia goes to Copenhagen with a means to deliver its targets and provide a much-needed boost to negotiations on a global deal."
Greens politicians disagreed.
"Today is a black day for Australia's green future, and we intend to campaign on this all the way to the next election. It's polluters payday in parliament house," said Senator Bob Brown, leader of the Australian Greens, which have five seats in the Senate.
UN climate talks in Copenhagen in December will seek to reach agreement on broader, and tougher, strategy to reduce greenhouse gas emissions globally to replace or expand the existing Kyoto Protocol, whose first phase ends in 2012.