Australia on Monday increased concessions for big polluters and delayed the start date of its emissions trading scheme because of the global financial crisis, in a stark shift on climate policy.
Prime Minister Kevin Rudd said the deepening global recession meant local emissions trading could not begin until July 2011, one year later than previously planned.
In a concession to green groups, Rudd said Australia would cut its greenhouse gas emissions to 25 percent of 2000 levels by 2020 -- up from 15 percent previously.
But he said the revised target would only apply if world leaders also signed up to an "ambitious" reduction goal in Copenhagen in December. Without an agreement, Australia's target will remain unchanged at five percent.
"The worst global recession since the Great Depression means we must adapt our climate change measures but not abandon them," Rudd told reporters.
"The start date of the carbon pollution reduction scheme will be delayed one year to commence from July 1, 2011."
It was a marked change in position by Rudd, who has for months insisted his government would proceed with emissions trading in 2010, despite the global market turmoil.
With Australia already suffering its worst drought in a century, the prime minister said late last year that failure to act on climate change could be disastrous, labelling any delay "reckless and irresponsible".
But in a change of tack, Rudd pushed back the trading scheme start date and said a one-year fixed-price period for carbon pollution permits would apply until July 2012 to assist businesses hit hard by the credit crunch.
Rudd said that during the fixed-price phase, an unlimited number of permits would be issued to eligible companies at a price of 10 dollars (seven US) per tonne.
He also said a "global recession buffer" would be provided for emissions-intensive trade-exposed industries, extending their pollution allowances for a "finite period".
Rudd won office on a strongly pro-green platform in late 2007 and the delay means the politically-contentious emissions trading scheme, which critics say will cost jobs, will not begin until after the next election in late 2010.
The prime minister rejected claims the changes softened his centre-left government's stance on climate change, saying the slower start would mean a "stronger, greener conclusion".
"I believe (this) is the most sensible, rational, balanced response to a fundamental change in economic circumstances," Rudd said.
If agreement was reached in Copenhagen to stabilise carbon dioxide levels in the atmosphere by at least 450 parts per million by 2050, Rudd said Australia would reduce its emissions by 25 percent by 2020.
Such an agreement would mean it was possible to save the Great Barrier Reef, Rudd said, adding that Canberra would agree to realise five percent of its commitment by purchasing international carbon credits.
Rudd, who ratified the Kyoto Protocol as his first act of government, is now faced with the task of pushing his climate laws through a hostile parliament.
Opposition party leader Malcolm Turnbull said he would not support the amended scheme, which he described as a "massive backdown" and "panic response" to criticism.
The minority Greens party accused Rudd of "browning down" his stance by giving major polluters 2.2 billion dollars in free permits, and described the revised 25 percent target as an "almost irrelevant green distraction".
Greenpeace said the concessions to industry "reek of industry lobbying" and the new scheme fell dismally short of what was required to effect real change.
But other conservation groups welcomed the pledge to more sweeping targets, while business groups commended Rudd for delaying the scheme and recognising the challenges of the economic crisis.
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