RPT-UPDATE 2-New Australian PM vows to revive carbon debate

Thu Jun 24, 2010 10:56am BST

(Refiles to additional subscribers)

* New Australia PM moves to boost support for CO2 policies

* Says needs industry, voter and political consensus

* Step could win back voters ahead of election (Adds industry, analyst comment)

By Bruce Hextall

SYDNEY, June 24 (Reuters) - New Australian Prime Minister Julia Gillard moved to revive a stalled carbon trading scheme on Thursday, pledging more consultation with industry and voters to win support for an issue that has split the nation.

Gillard, in her first comments to the media after former Prime Minister Kevin Rudd stepped down earlier on Thursday, said she believed in climate change, backed renewable energy and that the nation needed a price on carbon emissions.

But she also said emissions trading laws would lead to a significant structural shift in the resources-rich nation and they needed to be explained properly to the community.

Analysts said Gillard's comments could soothe disgruntled Greens voters who swept Rudd to power in 2007 on the promise of action on climate change but she would need to tread carefully.

"It is as disappointing to me as it is to millions of Australians that we do not have a price on carbon," Gillard told reporters. "And in the future we will need one. But first we need to establish a community consensus for action." [ID:nSGE65M0LY]

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Australia is the world's top coal exporter and among the highest per-capita emitters of planet-warming carbon dioxide, with coal used to generate about 80 percent of electricity.

Gillard faces a national election within months and climate change will be a major election issue.

Support for Rudd plunged in part because he decided to shelve the scheme in April after failing three times to get Senate support, disillusioning voters who wanted action on climate change.

"If elected as prime minister, I will re-prosecute the case for a carbon price at home and abroad," Gillard said, although any steps to revive emissions trading laws are likely to be in 2011 after the elections expected towards the end of this year.

KNIFE-EDGE

Her call might also win support from the Greens, who said the stalled emissions trading scheme was flawed and not ambitious enough, while the opposition had labelled it a great big new tax, leading to policy paralysis.

"I think consensus building is part of her nature," political analyst Norman Abjorensen told Reuters.

"I think voters need reassurance that the emissions trading system and climate change policies are still under consideration. I would think that would work to Labor's advantage," Abjorensen, of the Australian National University in Canberra, said.

But analyst Nick Economou from Melbourne's Monash University said Gillard faced a knife-edged struggle on climate policy.

"Those issues are dangerous for Labor because they have the potential to divide blue-collar and white-collar constituents," he said, with blue-collar voters worried over higher power bills associated with emissions trading, versus white-collar voters who wanted action on climate change.

Industry and green groups welcomed Gillard's comments.

"It seems she wants to have a very open negotiation with the view to resolution so that's definitely in investors' interest," said Nathan Fabian, chief executive of the Investor Group on Climate Change that represents institutional investors with about $500 billion under management.

"We're all on the same page for an ETS (emissions trading scheme). We're all on the same page for tax reform," Mitchell Hooke, chief executive of the Minerals Council of Australia, told an industry forum. "It comes down to design and consultation."

Opinion polls show a recent shift to the Greens party and a spectacular plunge in support for Rudd and the Labor Party.

"We believe the Labor Party's backflip on the emissions trading scheme and its associated decline in the polls is a key reason we now have a new leader," said Greg Bourne, chief executive of WWF-Australia.

Rudd had made fighting climate change and a carbon trading scheme, in particular, central to his administration, but was widely seen as unable to properly explain and sell the complex scheme to voters fearful of higher fuel and power prices, while miners expected shrinking profits and losses to overseas rivals. (Additional reporting by James Grubel and Sonali Paul; Writing by David Fogarty; Editing by Clarence Fernandez)

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