Page last updated at 10:18 GMT, Monday, 15 December 2008

Australia sets new climate target

Olympic Dam mine, South Australia
Mining is big business in Australia

Australia's Prime Minister Kevin Rudd has announced new measures to reduce greenhouse gas emissions.

These include cutting emissions by at least 5% by 2020 and a carbon trading scheme to be implemented by 2010.

But the proposals were immediately denounced by critics as inadequate, with the Green Party calling them a "global embarrassment".

Coal-reliant Australia has the highest per capita levels of greenhouse gas emissions in the developed world.

Mr Rudd promised a new era of Australian leadership on climate change when he came to office last year.

He signalled a break from the past by ratifying the Kyoto Protocol, something his predecessor John Howard had refused to do.

But he now stands accused of curtailing his environmental policy in order to limit the impact on Australia's coal industry and the wider economy.

'Hard targets'

The new measures announced by Mr Rudd will see:

• Greenhouse gas emissions cut by between between 5% and 15% by 2020, from 2000 levels

• A scheme to be implemented by 2010 requiring industrial polluters to bid for government licences to emit carbon. It will cover 75% of emissions and include 1,000 of the country's biggest firms, but will initially exclude Australia's drought-battered farmers.

"Without action on climate change, Australia faces a future of parched farms, bleached reefs and empty reservoirs," Mr Rudd told the National Press Club in Canberra, in a speech briefly interrupted by protesters.

"These are hard targets for Australia. If we don't act now, we will be hit hard and fast," said Climate Change Minister Penny Wong.

It's a total and utter failure - it's madness
John Hepburn
But Mr Rudd's critics say the new targets fall far short of the drastic cuts some environmentalists have warned are necessary to prevent catastrophic climate change.

The scheme will only aim for a 15% cut in emissions by 2020 if a global agreement on climate change is reached.

The new carbon trading scheme will see an initial cap on prices, but allow exemptions of up to 90% for major polluters who could be penalised by the added cost when facing untaxed competitors on the international market.

Other critics argue that Australia's targets appear modest when compared to the European Union's goal of 20% cuts on 1990 emissions levels by 2020 - though Mr Rudd counters that when population growth is taken into account, the per capita cuts are comparable with Europe.

On Saturday, a UN climate change conference wrapped up in the Polish city of Poznan, the halfway point in a two-year process aimed at reaching a deal in Copenhagen by the end of 2009.

That agreement is supposed to have two major elements - an expanded Kyoto Protocol-style deal committing industrialised countries to deeper emission cuts in the mid-term, perhaps by 2020, and a longer-term agreement encompassing all countries.

'Economy has won'

Mr Rudd has defended his government's scheme, calling it an approach which balances competing economic and environmental demands - he had faced calls from the business community to postpone the carbon trading scheme in light of the global economic downturn.

Australian PM Kevin Rudd

His government says the new scheme will trim only 0.1% off annual growth in domestic national product from 2010 to 2050, with a one-off increase in inflation of about 1.1%.

"You could say that the decision came down to a choice between the environment and the economy," Gary Cox, head of environmental derivatives at global brokers Newedge, told Reuters news agency.

"And at this stage it looks like the economy has won."

Environmentalists - who had been pressing for a minimum emissions cut of 25% - were outraged.

Australian Greens spokeswoman Christine Milne said the government's policy was a "complete failure", and called the 5% minimum target a "global embarrassment".

"It's a total and utter failure. It's madness," said John Hepburn of Greenpeace.

"There were expectations it would be low but nobody thought it would be this low. Five percent, which is what we are looking at, is an outrage."

Australia, which has been suffering a series of droughts in recent years, is expected to be one of the countries hardest hit by global warming.

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