Australian carbon plans thrown into crisis by new opposition leader

Australia's new opposition leader, Tony Abbott, today vowed to vote against the government's emissions cap-and-trade bill throwing into disarray plans to pass the bill ahead of this month's Copenhagen climate change summit and raising the prospect of an early election.

In a dramatic day of developments in Australia's capital Canberra, Abbott ousted Liberal Party leader Malcolm Turnbull, winning a leadership vote triggered by Turnbull's desire to support the government's revised emissions trading scheme (ETS) plans by 42 votes to 41.

Speaking following his surprise victory, Abbott immediately confirmed that he would oppose Rudd's climate bill in a vote originally scheduled for this week unless it is deferred until next year.

Abbott, whose victory was secured with support from a number of climate sceptics within the Australian Senate, said that he believed in climate change but would attempt to block cap-and-trade plans, which in their current form represented "a great big tax to create a great big slush fund, to provide politicised hand-outs run by a giant bureaucracy".

He added that he supported government plans to cut emissions 5 per cent by 2020, rising to 25 per cent if a global deal is reached at Copenhagen, but argued that the proposed emissions trading scheme was a costly and ineffective way of meeting the target.

"We will seek to refer the legislation to [a Senate] committee for further scrutiny," he said. "If we cannot get the support for that course of action we will oppose the legislation in the Senate this week."

Assistant Climate Change Minister Greg Combet said the government would still aim to hold a vote on the proposed bill this week, adding that it was hoping to convince some Liberal Senators to break ranks and support the legislation.

"The extremists have gained control of the Liberal Party," he told reporters. "They are opposed to taking action on climate change, they dispute the science. "

There remains a chance that some senators could defy Abbott, particularly given the tight leadership vote and the manner in which Turnbull was ousted after securing numerous concessions from the government on the proposed scheme.

However, if Abbott convinces his party to follow him, the government lacks the votes needed to pass the bill, leaving the legislation facing its second defeat within six months, potentially triggering an election early next year.

Opinion polls suggest that the ruling Labour Party would win an improved majority at any election, giving it the power to pass the cap-and-trade bill, but Abbott said that he would be happy to fight an election on the issue of the ETS. Rudd has maintained that he does not want an early election and would prefer to hold the election as scheduled at the end of 2010.

The latest developments are likely to further infuriate business leaders who have become increasingly frustrated at the uncertainty the long-running debate over the legislation has created.

"Australian industry is now thrown into total uncertainty regarding a price on carbon and therefore cannot make any informed investment decisions," Tim Hanlin, managing director of Australian Climate Exchange Ltd, told Reuters. " This is going to put Kevin Rudd under enormous pressure to call an election on this issue."