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Fed Govt set to delay plans to reduce carbon -

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Reporter: Sabra Lane

PETER CAVE: It's expected that the Federal Government is poised to announce a major backdown on the
introduction of its carbon pollution reduction scheme - with the scheme's start date postponed by a
year.

The scheme was due to start in July next year, but seems now likely to start in July 2011.

The Coalition has been advocating a delay saying that a 2010 deadline would mean the emissions
trading scheme would be both rushed and botched.

It's also expected the Government will change its carbon emissions targets, by increasing the
amount that Australia is prepared to cut CO2 emissions, if the world agrees to a plan at the
Copenhagen conference later this year.

Joining me now to discuss the latest is Sabra Lane in our Canberra studio.

Okay, what is going to happen Sabra?

SABRA LANE: Well, Peter we still don't have anything concrete yet but just as business talks about
concerns of carbon leakage with this scheme, we have had a fair amount of announcement leakage here
in the press gallery this morning.

It is expected the Prime Minister will make the announcement soon. We are hearing the start date of
the scheme will be pushed back a year to July 2011. It is an acknowledgement of the political
realities of the time.

Neither the Greens nor the Coalition say they will support the scheme as it is through the Senate.
These changes are an attempt to get the Coalition on side. It would be harder for Malcolm Turnbull
and his emissions training scheme spokesman Andrew Robb to say no.

They have long advocated pushing the scheme start date back to 2011 or 2012; but there is still a
number of MPs in the Coalition who wouldn't support this scheme.

Previously the Prime Minster baulked at pushing the start date back saying that he took the 2010
start date to the electorate and that it was a commitment he gave to the Australian people; but the
language changed on this subtly earlier this year - the Government started referring to that
deadline as an ambition.

Mr Rudd will no doubt argue that he has been listening to business. His climate change
parliamentary secretary Greg Combet has had many discussions with businesses over the past
fortnight.

The Government has no friends on this scheme. So far not one group has stood up and said it
supports the scheme 100 per cent.

PETER CAVE: It is not just the timing. There have also been leaks about the targets; how are they
going to change?

SABRA LANE: Peter, again, nothing has been confirmed but we are hearing the Government is said to
tweak that as well. Under the original plan, the Government had set targets of five to 15 per cent
carbon cuts for 2020. That is the Government said if the world came to an agreement on cutting
emissions at Copenhagen in December later this year, then Australia would commit to cutting its
emissions by 15 per cent by 2020.

The fallback position was five per cent if there was no deal. It is understood there will be no
change to that bottom target but the Government will increase the up end of the target range to 25
per cent if there is an agreement.

Now that is a fairly significant increase compared with the previous target and that 25 per cent
was the bottom end of the range that was argued at the Bali conference in 2007 and it was also a
target that Professor Ross Garnaut, the Government's former key advisor on greenhouse said was
achievable.

We are also hearing the Government will fix the price of carbon at below $40 a tonne for the first
year of operation. Previously it said that that price would be the minimum for the scheme and it
might even go as low as $20. Business will be very happy that they have got those amendments.

And we are also hearing that the Government might make further concessions to its scheme, somehow
factoring in the emissions cuts that homeowners make. The Australia Institute has argued that the
modifications that householders make for example by putting solar panels on their roofs etc, would
simply just give polluters more room to emit because there is no room in the scheme to factor that
in.

It is understood that the Government is keenly aware of that and it wants to address that.

The Greens will be happy with that point but they won't be happy with these other changes and they
have pre-empted the announcement by writing to the Prime Minister this morning with something of an
olive branch.

The Greens have told Mr Rudd that they are prepared to modify their own bargaining position. They
have been advocating a 40 to 60 per cent cut in emissions by 2020. They are saying they are now
prepared to talk with the Government about a 25 per cent cut as their minimum bargaining position.

I don't think the Government will budge on that given that last week the Parliamentary Secretary
for Climate Change, Greg Combet dubbed the Greens' policies on climate change as 'economic lunacy'.