Coal industry scores ETS sweetener

The Australian Federal Government has boosted carbon trade compensation to big emitters, coal companies and electricity generators, under a deal offered to opposition lawmakers and unveiled by Prime Minister Kevin Rudd today.

The changes see an additional $1.28 billion in expenditure, reaching $7 billion by 2019-20, Mr Rudd said in a statement.

The Government has approved the amendments to its carbon pollution reduction scheme, which are now being debated by the coalition party room.

"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.''

Double the money

The Government has conceded ground to the coal industry in order to get the deal through.

The coal sector will receive $1.5 billion in assistance if the coalition agrees to accept changes to Labor's emissions trading scheme. That new amount doubles the assistance available under the original plan.

The government will also commit $270 million to the coal mine abatement fund through the Climate Change Action Fund to assist gassy coal mines reduce emissions.Under the negotiated scheme, emissions-intensive trade-exposed industries will now permanently have a global recession buffer included in their their assistance.

That means those industries eligible for 60 per cent assistance previously will now get 70 per cent; industries eligible for 90 per cent assistance will now receive 95 per cent.

The 1.3 per cent carbon productivity contribution has been retained to ensure all industries reduce their emissions.

The coalition party room is still considering whether or not to support the amendments, which were rubber stamped by shadow cabinet early on Tuesday morning.

The meeting, which began at 10am, could last for as long as four hours.

Climate Change Minister Penny Wong, in a joint press conference with Prime Minister Kevin Rudd in Canberra, was short on specific details about additional assistance for industry.

Assistance to the electricity sector would be increased, she said.

A program of offsets will also be offered to farmers who make efforts to reduce carbon pollution.

''This is a comprehensive government deal,'' she said.

Households would be given the opportunity to play a direct role in tackling climate change.

''We will ensure that voluntary action ... will matter and will be counted under the scheme.''

Family assistance unchanged

Mr Rudd said average assistance of 120 per cent to low-income families remained in place.

''We don't intend with our families and in particular low-income families to shoulder the pain of the adjustment,'' he said. ''This has to be done equitably across the entire economy.''

The adjustments were necessary to get people across ''the hump'' into the new scheme.

''We believe we have got that balance right''.

 Mr Rudd asked the opposition to take into account a number of issues before arriving at a decision on the amendments.

''Australia is one of the hottest and driest continents on earth ... Australia will be hit hardest and fastest by climate change.''

That meant the only option was to vote for action on climate change, he said.

''Failing to act today is the riskiest course of action available to the parliament,'' Mr Rudd said. ''Failing to act today is to roll the dice on our children's future.

''As prime minister of Australia, I will not take that risk with the future.''

Mr Rudd said his request to all members of parliament was simple: ''Act in the national interest, not in your party's interest.''

Mr Rudd implored opposition senators to listen to their better angels.

''I return to the appeal I have made in recent days and that is for people of goodwill within the Liberal Party to get behind this path forward.''

-AAP & Reuters