Australia’s parliament today rejected—for a second time—a climate change bill that would effect a carbon trading program. The world’s biggest coal exporter was proposing to reduce greenhouse gases by 5% to 15% of 2000 levels via a carbon trading system similar to Europe’s within the next decade.

Senators voted 41 to 33 against the bill, bringing down Labor Prime Minister Kevin Rudd’s hopes of taking the legislation to Copenhagen next week. The failure of the bill was widely tagged to a deadlock over setting a price for carbon emissions, which the business community had said would complicate investment decisions.

The rejection provides Rudd with a potential trigger for an early election, a procedure under the Australian constitution to resolve deadlocks before the Senate and the House of Representatives. The house had already approved the carbon trading bill.

The bill’s failure could also allow parliament to design a carbon trading program that reduces emissions, supports new technologies, and protects the competitiveness of Australia’s export sector, said Mitchell Hooke, CEO, Minerals Council of Australia, in a statement. The organization’s head said that the Carbon Pollution Reduction Scheme (CPRS) had failed to meet these three critical criteria, and it would have cost the Australian economy at least A$120 billion to 2020.

“Not a single cent of this tax take was devoted to the development of new low emissions technologies,” he said. “Instead, the scheme would have cost thousands of jobs and billions of dollars of investment in regional and remote Australia, while failing to materially reduce global greenhouse gas levels. Around 90 per cent of Australia’s minerals exports would have paid billions of dollars in carbon costs while their competitors even in Europe and the United States—faced no such costs.”

Hooke had advocated a program that phased auctioning of carbon permits—similar to approaches implemented or proposed around the world, as in the EU, the U.S., and New Zealand.

Power generation accounts for 36.9% of emissions, or 199.5 million metric tons of carbon dioxide emissions in Australia. More than 80% of the country’s electricity comes from coal-fired power stations, Reuters reported.

In a related story, New Zealand last week effected a carbon emissions trading plan. The law will start in July 2010, but industry will only have to meet 50% of its targets with a slow phase-out of assistance after that, reported Radio New Zealand News.

Sources: Reuters, Minerals Council of Australia, Radio New Zealand News