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RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHMFISS/HQ EPA ADMINISTRATORS WASHINGTON DC
RHEHAAA/THE WHITE HOUSE WASHINGTON DC

C O N F I D E N T I A L SECTION 01 OF 03 CANBERRA 000492 
 
NOFORN 
SIPDIS 
 
STATE FOR OES/EGC TALLEY, DOE FOR SHRIER, WHITE HOUSE FOR 
BROWNER 
 
E.O. 12958: DECL: 05/28/2019 
TAGS: SENV KGHG ECON AS
SUBJECT: AUSTRALIAN OPPOSITION SEEKS TO DELAY EMISSIONS 
TRADING VOTE 
 
REF: A. 08 CANBERRA 1279 
     ¶B. CANBERRA 437 
 
Classified By: Acting Economic Counselor Wendell Albright, Reasons 1.4( 
b)(d). 
 
¶1. (SBU) Summary: The Opposition Coalition (Liberal and 
National Parties) announced May 26 that they will move a 
motion in the Senate to delay a vote on the government's 
Carbon Pollution Reduction Scheme (CPRS) (ref A) until 2010. 
The attempt to put off a decision on the CPRS is based on the 
current state of negotiations over climate legislation in the 
U.S., the degree of protection against carbon prices offered 
to U.S. industry, and the decision of several other countries 
to delay action on emissions reductions until the domestic 
U.S. position is clearer.  The Coalition is currently split 
over the CPRS, and Opposition Leader Malcolm Turnbull appears 
to be buying time to try and forge uVRQmQQha8Qrreduction target going into the 
Copenhagen 
negotiations.  The determination to delay could potentially 
give the government a trigger to call for early elections. 
End Summary. 
 
VOTING TO DELAY A VOTE 
---------------------- 
 
¶2. (SBU) Opposition Leader Malcolm Turnbull announced on May 
26 that the Coalition of Liberal and National Parties would 
attach an amendment to the CPRS bills to delay any vote until 
after the UN Framework Convention on Climate Change meetings 
at Copenhagen conference in December.  It was senseless, 
Turnbull argued, to take on legal commitments in the midst of 
ongoing negotiations in the U.S. Congress over what a U.S. 
deal would look like.  The political process in the U.S. 
would largely determine the "standard" for national action to 
reduce emissions internationally, and strongly influence 
Copenhagen's outcome.  Turnbull said that the current Rudd 
plan provided far less protection for domestic industry than 
offered in draft legislation being worked on in Congress, and 
that several other countries, like Canada, had put their 
national actions on hold while waiting to see what would 
happen in the U.S.  Turnbull offered unconditional support 
for an Australian mid-term emissions reduction target of at 
least  5 percent by 2020, a 
nd suggested in the interim that Australia should establish a 
"voluntary carbon market" along the lines of the Chicago 
Climate Exchange.  He said the Coalition would also seek to 
amend the bills to instruct the Productivity Commission to 
study the impact on job growth in Australia. 
 
¶3. (C/NF) Econoff spoke with climate advisor to Opposition 
Spokesman on Climate Andrew Robb on May 26.  According to 
Stuart Eaton, the announcement's most important change is the 
commitment to bipartisan support for at least a 5 percent 
reduction in emissions following Copenhagen.  Eaton said the 
Qreduction in emissions following Copenhagen.  Eaton said the 
Coalition party room was strongly united behind the concept 
of deferring the vote until a clearer picture of the 
international outcomes is available.  Should the Rudd 
government be able to meet its standards for adopting a 
higher goal of up to 25 percent (based on an international 
deal to reduce emissions) then the Coalition was offering 
unconditional support for that outcome as well.  Few 
positions within the party room would change next year, Eaton 
said, but an international deal that met Rudd's conditions 
would make many of the Opposition's concerns disappear. 
Eaton said that the advice offered the opposition was that 
the threat of a "double dissolution" would be minimized or 
eliminated by a successful vote to amend the bills to defer 
 
CANBERRA 00000492  002 OF 003 
 
 
them and conduct a Productivity Commission review. 
 
OPPOSITION DIGS IN 
------------------ 
 
¶4. (SBU) The Rudd government's CPRS plan faces delay or 
resistance at nearly every turn.  The government's timeline 
had been to pass the CPRS legislative package during the June 
sitting of Parliament.  The Greens, who are adamantly opposed 
to the relatively low cuts in the bill, want a vote on the 
package as soon as possible so they can vote against. 
Independent Senator Nick Xenophon has said publicly that the 
bills should not be voted on this session.  Hard line 
opposition by the largely rural National Party to the bill 
has left those in the Coalition who might support the plan 
hanging.  The Labor Party, without a majority in the Senate, 
needs at least seven non-Labor  votes for the CPRS to pass in 
the Senate.  If the Senate fails to act or rejects a bill 
twice, Rudd could potentially use the setback to call for a 
"double dissolution" early election.  While Rudd has not 
indicated whether he would use that leverage, most pundits 
think this would hurt the Nationals, Liberals, and 
Independents and help the Labor Party and Greens. 
Uncertainty would remain over whether a successful amendment 
to delay consideration of the bills (which is unlikely given 
the majority the government holds in the House) would 
constitute a "failure to pass" on the bills and provide a 
possible double dissolution lever.  The Climate Institute's 
John Connor told econoff on May 26 that it would be "good 
times for constitutional lawyers," if things developed that 
way, as both sides would likely call on the High Court to 
settle any ruling that went against their interpretation. 
 
¶5. (C) Signs of concern in the government were clear over the 
past few weeks.  The concessions made by Rudd and Climate 
Minister Wong on May 4 (ref B) were substantial but not 
likely to be enough to win passage of the bills.  Climate 
Minister Penny Wong (now on travel to the Major Economies 
Forum in Paris) hit Turnbull hard May 15-20 in a series of 
media interviews where she noted the deep division in the 
opposition and publicly dared Turnbull to come up with a 
"consistent position."   Department of Climate Change 
Assistant Secretary Barry Sterland invited econoff in to 
discuss the changes in the bills on May 8, and took pains to 
state that the "message for the U.S." was that the government 
was "absolutely" determined to pass the bills.  The 
Australian Conservation Foundation (the largest environment 
NGO in Australia) said on May 20 that their support for the 
CPRS was "conditional" based on linking improved 
environmental performance to economic assistance to industry 
(A$13 billion between now and 2016) in the 
 bills.   The results of economic modeling commissioned by 
the Minerals Council of Australia (the head mining lobbying 
group) were released on May 21 and claimed to show that 
26,000 jobs would be lost in Australia's resource sector 
Q26,000 jobs would be lost in Australia's resource sector 
under the plan.  Australia Industry Greenhouse Association 
CEO Michael Hitchens told econoff on May 22 that business 
"wants action on climate - we just want any plan but this 
plan."  Hitchens, who has previously told us industry sees 
little value in delay, inquired about the timelines facing 
congressional action on climate in the U.S.  Nationals 
Senator Barnaby Joyce told the media on May 24 that the 
National Party wanted to deliver certainty for Australian 
business, and that certainty was "no." 
 
GREENS VIEWS 
------------ 
 
¶6. (C) Greens Senator Christine Milne's climate advisor 
Oliver Woldring told econoff on May 15 that the Greens were 
"not kingmakers" on this issue.  He said that, in his view, 
the Opposition would work to defeat the legislation if 
 
CANBERRA 00000492  003 OF 003 
 
 
brought forward in June, but pass it with some minimal 
further concession in September to avoid a double 
dissolution, which would be "very bad" for the Liberals, and 
"very good" for the Greens.  Greens Leader Bob Brown's Chief 
of Staff, Ben Oquist, told poloff on May 26 that he assumed 
business had put a lot of pressure on Turnbull to accept the 
deal, but with the Coalition divided, all Turnbull can get a 
consensus on is outright opposition or a delay.  Oquist told 
poloff that it made no sense for the government to force a 
vote on the bill before Copenhagen as it would leave 
Australian negotiators with no flexibility.  Oquist said the 
Greens could accept a deal with the government if it made the 
current legislation much tougher on emissions and adopted a 
hard commitment to a 25 percent reduction over 1990 levels by 
2020 regardless of the international position.   The Greens 
had acted constructively so far, Oquist noted, but that was 
likely to change soon.  Milne herself told the media on May 
26 that "delay equals death" for the government's timeline, 
and reiterated opposition to the current form of the CPRS. 
 
¶7. (SBU) Comment:  Turnbull is playing a bad hand, taking the 
weakness of a divided party and trying to parlay that into a 
delay, to inflict a loss on the government and buy time to 
come up with a coherent Coalition policy.  By playing on 
fears over further job losses and the lack of clarity in 
where U.S. policy will end, he hopes to put off having to 
either split the Coalition and support the CPRS or knock it 
back and see what Rudd does before Copenhagen.  Simply 
delaying the scheme will neither bring supporters on board 
nor take industry pressure off Turnbull, but it will provide 
more time to calibrate more closely with a U.S. plan and 
squeeze a few more concessions from Labor.  End Comment. 
 
CLUNE