Australian Senators Reject Bill Meant to Cap Emissions

By RACHEL PANNETT
CANBERRA, Australia -- Lawmakers Thursday rejected a bill aimed at capping Australia's greenhouse-gas emissions, a widely expected move that could result in a call for early elections by the center-left Labor government if it can't convince key conservatives to back the plan in coming months.
Climate Change Minister Penny Wong vowed to bring the climate bill back to Parliament before year-end. "Australia cannot afford for climate-change action to be unfinished business," Ms. Wong told lawmakers. "This bill may be going down today but this is not the end."
The Australian cap-and-trade plan -- similar to one operating in Europe since 2005 -- would cap carbon dioxide emissions from July 2011, forcing heavy polluters like power generators and aluminum and cement makers to buy permits to account for their greenhouse emissions.
The bill faced industry criticism that said it would jeopardize jobs and add costs for consumers and businesses. Environmentalist lawmakers from the minority Greens party were happy to see the bill defeated because they think its relatively low carbon emissions reduction targets and generous industry allowances rendered it ineffective.
Analysts say the most likely outcome now is either that the bill passes at a second vote later this year, with modest modifications, or is enacted in the first half of next year after the government uses the bill's failure to call early elections.
Write to Rachel Pannett at rachel.pannett@dowjones.com