THE Coalition's lead climate change negotiator is optimistic about reaching an agreement with the Government on the emissions trading scheme - an outcome which would force the issue back to the Coalition party room and prove the stiffest test of Malcolm Turnbull's leadership.
With the Government demanding a vote on its emissions trading scheme by the end of next week, the Opposition's emissions trading spokesman, Ian Macfarlane, told the Sydney Morning Herald yesterday he believed he could make a deal that would be accepted by the majority of the party room. "I'm still optimistic of a deal," he said.
Mr Turnbull was forced to put his leadership on the line just to be able to negotiate with Labor. He has promised the party room would have the final say on any deal. The party room is split and MPs and Senators hostile to a scheme began positioning yesterday in the event Mr Turnbull would seek party approval next week.
The Government has offered to permanently exclude agriculture, one of the Coalition's key demands, but this earnt it a backlash from industry yesterday which said it would have to pick up the slack.
"By excluding agriculture, the burden of meeting emission reduction targets will fall more heavily and will impose greater costs on industries that are subject to the proposed [scheme]," said Heather Ridout, the chief executive of the Australian Industry Group.
"The exclusion of agriculture will mean that over the longer term, industries covered by the [scheme] will have to find and fund 20 per cent more abatement than would have been the case if agriculture was included."
Consequently, she said, industry should receive more compensation.
The legislation was set to pass the House of Representatives last night and enter the Senate.
The Nationals, who are no longer relevant because they will oppose the scheme no matter what concessions the Government offers, argued yesterday the impending failure of the Copenhagen climate change conference meant there was even less urgency than before for Australia to act.
Liberal opponents of the scheme were arguing the same. But Mr Turnbull said the negotiations would proceed as before because a failure at Copenhagen had been anticipated. "Most people expected for a long time that Copenhagen would result in a political agreement and any treaty would take some time."
The Prime Minister, Kevin Rudd, told Parliament yesterday the watered-down expectations for Copenhagen were all the more reason why his scheme should be passed. Each nation which took action improved the chances of a global deal, he argued.
On Sunday, the leaders of the 21 APEC nations met in Singapore and accepted that next month's Copenhagen conference would not meet its aim of having all countries agree to new binding targets that would apply beyond the Kyoto protocol.
Instead, the leaders agreed to adopt a two-step process of a political agreement at Copenhagen with binding action later.
"Without strong national commitments, there can be no deal," Mr Rudd said.
The Coalition began the talks by demanding the exemption of agriculture and more generous compensation for heavy industries and the electricity sector.
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