VINACHEM

Australia risks falling behind countries such as China in reducing greenhouse gas pollution without a price on emissions that will ensure the “health and prosperity” of the economy, Treasurer Wayne Swan said.

“The Chinese are taking dramatic action to reduce their emissions through a variety of mechanisms,” Swan said yesterday on Australia’s Channel Nine television. “It’s not true to say other countries are not moving. We are getting left behind.”

Australian Prime Minister Julia Gillard wants to set a carbon price starting in July 2012 in preparation for a trading system that could begin as early as 2015. The opposition Liberal-National coalition, led by Tony Abbott, vowed to fight the plan, saying it would add to household electricity bills.

Imposing a carbon price to encourage Australian businesses to curb their emissions will drive investment in renewable energy technologies, Swan said. Australia, the world’s biggest coal exporter, has set a target of generating 20 percent of its power from renewable sources like wind and solar by 2020.

“There is no cost-free way to transform our economy and reduce emissions,” Swan said in his weekly notes e-mailed yesterday. “Putting a price on carbon through a market mechanism is the least-cost and most effective policy option.”

Large polluters will pay a price to emit carbon, Swan said in the television interview yesterday.

“That money will be used to assist households and industry,” he said. “If you listen to Mr. Abbott, you would think the government was going to go out there and take the money out of people’s pay packets.”

Climate Debate

Climate change is a “debate we can win,” Swan said. Australian Infrastructure Minister Anthony Albanese, speaking on Channel Ten’s “Meet the Press” program earlier yesterday, said introducing a price on carbon is “critical.”

BlueScope Steel Ltd.(BSL), Australia’s biggest steelmaker, has called the government plan “economic vandalism” and said it would reduce the company’s competitiveness as it battles high raw-material costs and the stronger Australian dollar. Alcoa Inc.(AA), the biggest U.S. aluminum producer, said it supported a “carefully designed” price that doesn’t damage the industry.

Woodside Petroleum Ltd.(WPL), developer of the A$14 billion Pluto liquefied natural gas project in Australia, said its “trade-exposed” exports should be excluded from any climate change proposal because there isn’t an international accord on pricing greenhouse gas emissions. The government plan should reflect the role LNG plays in lowering emissions, the Perth- based company said in an e-mailed statement yesterday.

Support in Parliament

Gillard’s Labor Party needs the support of four non-party lawmakers to pass laws in parliament. A multiparty climate change committee, formed after a request from the Greens party, released a framework document on reducing emissions on Feb. 25 which didn’t fix a carbon price or set a level of compensation to be paid to companies and households.

Gillard vowed to revive the climate-change plan after she replaced Kevin Rudd last year. Rudd’s popularity as prime minister plummeted after he shelved his cap-and-trade proposal.

“There will be some difficult conversations to come,” Gillard said on Feb. 24.

Abbott yesterday called Gillard’s plan a tax that “won’t necessarily help the environment,” according to a transcript. “But it certainly will hit everyone’s cost of living.”