Wednesday, 28 April 2010

Scientists refute carbon capture doubts

LONDON (Reuters) - Geologists refuted on Monday a report which in January had cast doubt on a technology to bury greenhouse gases underground, and on which some policymakers have pinned hopes to fight climate change.

British geologists and engineers rejected the doubts on Monday, pointing to pilot projects in an email to Reuters, following a report about January's article in the Guardian newspaper on Monday.
Carbon capture and storage (CCS) involves trapping and storing underground carbon dioxide produced by power plants which burn fossil fuels.
Some academics say that the world's efforts to limit dangerous climate change depends on CCS, which can in theory almost eliminate carbon emissions from burning coal and so give the world time to develop cheap fossil fuel alternatives.
The trouble is that the full chain of CCS processes from trapping and piping to burying underground carbon dioxide (CO2) produced by power plants is untested at a commercial scale.
Pressure levels in underground aquifers could reach levels where projects either could not pump any more CO2 in, or force the greenhouse gas to leak into the atmosphere, rendering the process worthless, argued a paper published earlier this year. "The physics is so straightforward," said Christine Ehlig-Economides, co-author of the paper published in the Journal of Petroleum Science and Engineering.
"When you try to inject something into an existing formation which is already at pressure, it (pressure) has to go up," she told Reuters on Monday. "The models that people are using more often than not do not accommodate this."
The paper had argued that an aquifer may need to be the size of a U.S. state to store CO2 from a single power plant.
She acknowledged on Monday criticism of that "general" assertion and said the authors had applied the model to particular acquirers and showed that these could in fact store CO2 for 25-30 years from clusters of power plants.
"If that's sufficient for everyone, fine. If you're really sincerely talking about accommodating large numbers of power plants, already spending impossible amounts of money and energy to capture, get this CO2 in the ground we need to be spending very close attention to what it entails," she said.
British geologists rejected the doubts, pointing to tests such as Norway's Sleipner project.
"The most profound error is that the subsurface is not made of sealed boxes," said Edinburgh University's Stuart Haszeldine and Martin Blunt from London's Imperial College.
"It is well known ... that below ground contains many hundreds of meters of porous rock suitable for CO2 storage."
Norway has buried millions of tonnes of CO2 for more than a decade below the seabed of the North Sea between Britain and Germany. "It's not anywhere hear the volumes you're talking about for real operations, for even a small power plant," countered Ehlig-Economides, referring to Sleipner.
A wider concern about CCS is cost. It is expected to add about $1 billion to the capital cost of a power plant and cut efficiency by a quarter. European Union Energy Commissioner Guenther Oettinger said on Monday he doubted that the technology would take off in Germany, because of the difficulty forcing states to take and store CO2 from each other.
(Reporting by Gerard Wynn, Editing by Sue Thomas)

Australian Government Offers A$40 Million To Fund Carbon Capture Project

By Ray Brindal
Dow Jones Newswires

CANBERRA -(Dow Jones)- The Australian Government will contribute up to an extra A$40 million to help develop the Calera mineral carbonation project--the nation's first carbon capture and use project--if feasibility studies and a pilot plant prove successful, Resources and Energy Minister Martin Ferguson said late Tuesday.
The Australian and Victorian state governments have already provided an initial A$3.5 million each for the Calera project, which captures carbon dioxide from the Yallourn power station to make solid calcium and magnesium carbonate and bicarbonate minerals that can be used as building materials, the minister told a coal conference in Melbourne.
Funding for the project will come from a A$400 million National Low Emissions Coal Initiative, one of a raft of multi billion dollar programs designed to minimize or capture carbon dioxide emissions. About 75% of Australia's electricity is generated using coal, and more than 90% of Victoria's power, most of it from low rank brown coal.
Copyright © 2009 Dow Jones Newswires

Wind turbine maker Vestas lands record order

Portland Business Journal - by Cathy Proctor

The Vestas Wind Systems A/S wind turbine blade plant in Windsor, Colo., has restarted production after work halted earlier this year due to the global recession, a company spokesman said.
The Danish company, which has its North American headquarters in Portland, also announced it has signed the largest single order in company history.
Vestas said it had signed a "Master Supply Agreement" to build, deliver and maintain wind turbines capable of producing up to 1,500 megawatts of power in 2011 and 2012. The order includes an option for expansion to another 600 megawatts that can be exercized in 2010 and 2011, Vestas said.
The order came from EDP Renováveis (EDPR), the world's third-largest wind power company, after a competitive bidding process, Vestas said. EDPR is the renewable energy branch of EDP-Energías de Portugal, one of Europe's main electricity utilities.
The order calls for the wind turbines to be delivered to projects in Europe, North and South America.
It's too early to tell whether Vestas' manufacturing plants in Colorado will be involved in filling the order, Portland-based spokesman Andrew Longeteig said in an e-mail.
According to Dow Jones reports, EDP-Energías de Portugal CEO Antonio Mexia said that the utility has cut its planned investments in the U.S. by 10 percent for 2010 and 2011 — equivalent to about 500 megawatts of wind power — due to difficulties landing long-term power supply agreements and delays in creating a national goal for using renewable power.
Vestas' wind turbine blade plant in Windsor opened in March 2008. But the company halted production at the plant during the first quarter of this year after the credit crunch slowed work on wind farms in the United States, Vestas officials have said. Employees continued to work at the plant, focusing on retooling and training rather than blade production.
But production has restarted this month, Longeteig said.
Vestas also is building another plant in Colorado to make the towers that hold the wind turbines.Read more: Wind turbine maker Vestas lands record order - Portland Business Journal:

New government must create local demand for low carbon economy

Whoever is leading the country come May 7 needs to do more to stimulate the low carbon economy, according to a leading figure in the environmental industries. Philip Dilley, chairman of consultancy Arup and the London branch of business lobby the CBI, said: "The incoming government has to invest in creating a local demand for low carbon energy," He called for more regulations to give business certainty and help the commercial world to make the right choices. "We need more regulations that incentive investment in low carbon technology," he said, citing the new Feed in Tariff. Speaking at an event hosted by clean tech company Ultra Green this week, he also said the new government needed to address the skills gap facing the industry. "One in three firms in the environmental sector is being hampered by a shortage of skilled staff," he said. He also called for central government to empower city authorities, pointing to the progress made by metropolises at the Copenhagen climate negotiations. He pointed out that national and regional or local initiatives could work well together when providing a stimulus for the low carbon economy. Citing London's congestion charge, brought in by the previous Mayor Ken Livingstone, he said that by allowing electric vehicles to enter the city centre free, the scheme had done more for low carbon vehicle sector than any national incentive. Coupled with national incentives, that had made the UK an attractive prospect for those seeking to develop electric vehicles. "That's created an embryonic industry in this country," he said.
Sam Bond

Why CO2 projections on Global Warming are false

April 27, 2010
Analysis by: GLG Expert Contributor
While projections and predictions on CO2 concentrations in the atmosphere are required to begin the dialog necessary to avert climate change, they are most likely false.
It has been estimated by scientists that CO2 levels in the atmosphere must be limited to a maximum of 450ppm, which is widely considered to be the maximum CO2 concentration level required to avoid the worst effects of global warming. This entails limiting planetary temperature rise to 2 degrees Centigrade.
For reference purposes, the concentration of greenhouse gases before the Industrial Revolution was 280 parts per million by volume, currently we are at 380 ppm and the maximum as mentioned is generally agreed to be no more than 450 ppm. Based on these thresholds, scientists and researchers have set several future-looking scenario projections on what CO2 levels will be in 2020, 2030, and even 2050. While these projections and predictions are required to begin the dialog necessary to avert climate change, they are most likely false.
It is impossible to know what innovations will be developed over the next 5-10 years, much less what will be happening in 30 years. The past no longer provides reliable insight into our future given the exponential volatility that technology has injected. As John Seely Brown has mentioned, the 20th century was primarily driven by moments of disruption (such as electrification, flight, automobile, and telephony), followed by years of stability from the build-up of infrastructure to realize the efficiency of scale benefits from an innovation (through manufacturing, transportation and distribution efficiencies).
The stability of the 20th century afforded this approach as business had reasonable means to extrapolate from the past and predict and determine what to build, where and how much. Our last 100 years were built on a factory business model that relied on organizational efficiency, hierarchy and control in order to minimize variance.
“I think there’s a world market for about 5 computers.”Thomas J. Watson, Chairman of the Board, IBM (around 1948)
The factory model of the past is no longer relevant in the 21st century. The embedded and obscure modeling assumptions (based on past industrialization patterns), introduce significant quantitative flaws in the predicted outcomes of the simulated predictions. This includes what CO2 levels in the atmosphere will be in 2030 or 2050. As Vinod Khosla has so articulately expressed, given the current rate of change in technology, trying to predict what 2030 will be like is akin to predicting what 2010 would be like back in 1910!
The fact is that never in the history of man-kind have we had so much constant flux and unpredictability due to exponential technological innovation. Imagine how technology in the past few years has effected:
how we commute (i.e. GPS in cars and phones),
how we create, share and consume knowledge (i.e. Google or collaborative web technologies),
business transaction costs (i.e. how iTunes has collapsed transaction costs for delivery of content to users), and
impact of time and geography (i.e. email, Skype, FTP – connect anywhere, anytime)
Who could have predicted Google back in 1990? Or that General Motors or Lehman Brothers would have been bankrupt in 2009? The future is being invented each day and influenced by a confluence of forces we could not have even imagined just 10 years ago! So how can we predict what will be happening 20 years from now?
“Heavier-than-air flying machines are impossible.”- Lord Kelvin, President, Royal Society, 1895
What we have learned is that technology greatly expands the art of the possible and that today’s impossible will be tomorrows common sense. In Phillip Tetlock’s words “We are not natural falsificationists: we would rather find more reasons for believing what we already believe than look for reasons that we might be wrong. In the terms of Karl Popper’s famous example, to verify our intuition that all swans are white we look for lots more white swans, when what we should really be looking for is one black swan.”
As we have no idea what amazing technology inventions will occur over the next 20 years - inventions that may fundamentally change how we produce, manage, distribute and consume energy; I predict that we have no idea what CO2 levels in our atmosphere will be in 2030 and beyond.
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
This author consults with leading institutions through GLG

Rivers in England and Wales face drying out because of climate change

One in three rivers is in danger of drying out due to demand for drinking water, including some of the country's most famous stretches of salmon fishing, according to conservationists.

By Louise Gray, Environment CorrespondentPublished: 7:00AM BST 28 Apr 2010
The Worldwide Fund for Nature (WWF) fears that the growing population will mean more water from Britain's rivers is needed for washing and drinking in future.
They are already running low and climate change could make the situation even worse as floods and droughts become more frequent.

The charity is warning that during a hot summer with little rainfall, a third could almost completely dry out because so much water is being taken by utility companies. This would have catastrophic consequences for wildlife.
The charity wants new restrictions so that water companies can no longer take too much water from areas where wildlife is endangered. Also households need to cut their water use by more than 10 per cent over the next 20 years, it says.
The Rivers on the Edge report looked at some of Britain's best-loved chalk streams including the Itchen in Hampshire, a famous fishing river. Like other rivers in England, wildlife including otters, salmon, kingfishers and water voles have struggled to survive as more and more water is taken from the river to feed the nearby cities of Southampton and Portsmouth.
The Environment Agency estimate that river flows in some areas could be reduced by 80 per cent by 2050 and ecosystems in a third of river catchments are already in danger of drying out in a hot summer. Rivers in danger include the upper Wharfe in Yorkshire and a number of rivers in the south including the Severn.
The WWF said the only way to control the problem is to reduce the amount of water being used. At the moment people in Britain use around 150 litres per day but this needs to come down 12.5 per cent to 130 litres by 2030.
The charity want water meters in every home across the country to help households limit water use and education programmes to help people save water. For example by taking showers rather than baths.
The water companies also need to stop leaks, with 3,000 million litres wasted every day. Water can be saved by using more "recycled" effluent from sewage for irrigation and non-drinking water.
The WWF called for a complete overhaul of water regulation in the UK so that water is used in a more sustainable way. At the moment most abstraction levels are set by licences handed out in the 1960s, resulting in up to 3,300 million litres more per day being taken from certain rivers than the environment can sustain.
WWF want all damaging abstraction licences to be amended or revoked by 2020, so that water companies can no longer drain rivers that are important to wildlife.
Alicia Doherty, of WWF, admitted it will cost money to revoke the licences and to improve infrastructure but argued it could bring down costs in the long run.
"Water stress or water scarcity, where we are simply taking too much water from the natural environment – is a big issue in the UK. Yet it's one that many of us are unaware of," she said. "One third of river catchments predominantly in the south and east of the country are over abstracted and over licensed to the extent that we are risking significant damage to ecosystems. This is only likely to get worse as the climate changes and our population rises. A range of options and considerable innovation will be needed to address unsustainable abstraction."

Engineers build underwater dome to contain Gulf of Mexico oil spill

Jacqui Goddard in Miami

Engineers are crafting a giant underwater dome to help to contain an oil spill in the Gulf of Mexico after attempts to shut off the leak using robotic submarines failed.
BP, which leased the Deepwater Horizon rig that exploded 50 miles (80km) from the Louisiana coast last Tuesday, killing 11 workers, said yesterday that it was pursuing new tactics after failing to prevent its spread by closing a valve in the pipe.
While the robots continued their efforts one mile down and a new rig arrived to drill into the leaking well and plug it in an operation that could take months, BP said that its dome should trap the escaping oil and funnel it to tanks on the surface.
Such devices were tried when Hurricane Katrina swept through the Gulf in 2005 but have never been used in water this deep. Tony Odone, a spokesman for BP, said: “They have been used in shallow water before. They contain the oil in that dome and then suck it up. “The ROVs [remotely operated vehicles] will continue trying but we are trying to get these other things activated as quickly as possible, too.”
The race was on to contain the spill — which is 48 miles at its widest, 39 miles at its longest and has a circumference of 600 miles — before it reaches the coast of Louisiana. Last night it was 30 miles from shore. A total of 1,000 people are involved in the disaster response, from BP workers and the US Coast Guard to the National Oceanic and Atmospheric Administration and oil industry experts.
“We have the world’s experts working with us right now,” said Doug Suttles, BP’s chief operating officer for exploration and production.
There are concerns of a major environmental disaster and potential devastation for the seafood industry should the oil spread faster than it can be cleaned up. Louisiana is one month away from opening its inshore shrimping season, its crab season is just starting and oyster beds could be closed if the oil gets into coastal estuaries. Bird nesting areas on the fragile barrier islands would also be at risk.
“The big question is where is this oil going to go?” said Ed Overton, an environmental science expert at Louisiana State University. Sunlight and bacteria should help to break down some of it, he said but the coast — which is home to 40 per cent of America’s wetlands but loses up to 35 square miles of it a year due to erosion — could become a “God-awful mess for a while”.
“It’s a fragile area already. The good news is that the whole environment down here has had oil exploration for 50, 60 years so the bacterial colonies are already acclimated. Whether it’s a big glob or a small glob, if it gets onshore it covers the grass which will die away and that causes land erosion,” Mr Overton said.

Kevin McCloud's top green home tips

As Grand Designs Live opens, TV presenter Kevin McCloud selects 10 products from recycled scourers to insulating blinds•

Sting plus - upholstery made from nettles
There are lots of points to make about this fabric. But the main one is that it does everything a synthetic fabric can achieve (meeting fire ratings, "rub tests", resistance to fading and so on) while being made out of nettles and old wool, the two things you'll be almost guaranteed to find in a British field, together with barbed wire. There's nothing barbed about this fabric, however – it may be ethical but it doesn't sting or itch. Like linen, which is another natural fabric made from plant fibre, Sting is beautiful and glamorous.
Smile Plastics recycled plastic worktops
When it comes to specifying sheet materials for a new kitchen or some cupboards, recycled plastics often get overlooked, usually because they look like frozen sick. Smile Plastics, however, have begun making sheet plastics made from single source plastics: recycled and chopped CDs for example, which give the material the iridescence of abalone or mother-of-pearl. This is upcycled plastic. I chose it for this list because I wanted designers and architects to see it and specify it, as well as consumers.
Parans solar lighting
This product is almost too technical to describe. An egg-crate panel of little rotating eyes follow the sun all day long like a sunflower, collecting direct sunlight and distributing it through a building via a network of fibre-optic cables. This is ideal for introducing light into earth-sheltered or buried buildings or the thousands of London homes now retro-fitted with three underground storeys. It is brilliant. Literally.
Giles Miller - cardboard furniture
Giles is a designer-maker of extraordinary pedigree who examines the value and the usefulness of everything he utilises. So he forces us to re-evaluate materials like corrugated cardboard as not only durable and utilitarian, but also beautiful. We already ran the Grand Designs Awards and these are judged by a panel of luminaries from the worlds of design and sustainability. But choosing this range of cardboard furniture and the other green products here was a much simpler exercise – and much more personal. These are products and inventions that I've chosen because I like them, I've used or tested them and I wanted them to get more exposure.
Hemcrete - greener concrete
Hemcrete is a walling material that can be sprayed or cast like concrete, but it's made from lime and hemp. It performs both as an insulant and as a thermal-mass and it locks up carbon as it grows. The average hemp house can stow away about 20 tonnes of CO2 into its walls this way, about 40 kilogrammes for every square metre of wall in comparison with a traditional brick, block and cavity wall which is responsible for the production of about 100kg for every square metre. And hemp is the second-fastest growing crop on the planet after bamboo, so it can be slotted in between other crops during a growing season. It also requires almost no inputs and enriches the soil.
EcoForce - recycled everyday homewares
I remember clearly the day – as if it were yesterday – that someone told me that toilet roll wasn't made from recycled paper. What do you mean? Surely it's got to be, it only gets used once? The same goes for scourers and cleaners. You'd sort of expect throwaway bits of foam and gritty green plastic to be of the very cheapest grades of recycled plastic. But not a bit of it. They're all manufactured from virgin petrochemicals. I can understand that the acrylic used for making DVDs, that are read by lasers and spun at 200mph, needs to be perfect and crystal clear. But not my clothes pegs.
Black Mountain Sheepswool insulation - natural insulation
We all know about sheepswool insulation that comes from New Zealand or other far-flung outreaches of the world of sheep. It is highly breathable, natural, people-friendly and hygroscopic, regulating the moisture content in a cavity such as a wall. Very, very useful in timber framed buildings where condensation and moisture can dissolve the building into wet rot. And Black Mountain is British. Home-grown. Many of our sheep are bred to be shorn twice a year but only get fleeced once because the market for wool is so depressed. If we all bought sheepswool for our attics the flocks of Britain would be much more comfortable.
Newform Energy - combined solar electricity and hot water
Since Becquerel used selenium to experiment with photovoltaics in 1836, and Horace de Saussure captured solar heat in his homemade "hotbox" in 1767, the two disciplines of using solar energy to produce either electricity or hot water have remained separate. Until a very short while ago when some brilliant German physicists decided to circulate the water from solar thermal panels around the electronics in solar photovoltaic panels providing – bingo – a faster-than-normal supply of hot water. The resulting panel also produces electricity more efficiency than a standard photovoltaic panel.
Heatsaver Shades - insulated blinds
Heatsaver is an American firm that make insulated window blinds from the multilayer thin insulation sold for roofspaces which looks like the covering of a Nasa spaceship. Heatsaver uses a less complex structure in its product, which has the appearance of interlined cream linen Roman blinds and the thermal performance of several inches of plastic foam. Their secret, however, lies in a specially designed channel on the wall, in which the blind slides, forming an effective seal. There is no better way of keeping heat inside a building with large glazed walls or a listed building that is single-glazed.
Tirex from Interface Flor - flooring made from recycled rubber
We throw away 486,000 tonnes of tyres every year in Britain. Tirex carpet tiles are recycled — with a minimum of processing — by slicing old tyres and rubber machinery belts into long French fries and then bonding them together side-on. The durable fabric webbing that is inside the tyre wall is exposed as the top surface of the carpet and the resulting texture is a revelation. Interface Flor sell it as "entrance matting" but Tirex doesn't look anything like a tyre. Its colours are grey and brown. It is elegant and sophisticated and every office in the world and quite a few homes ought to be carpeted with it.

Experts call for hike in global water price

World Bank and OECD say water is a finite resource that must be valued at a higher price in order to repair old supply systems and build new ones

Juliette Jowit in Paris, Tuesday 27 April 2010 17.32 BST
Major economies are pushing for substantial increases in the price of water around the world as concern mounts about dwindling supplies and rising population.
With official UN figures showing that 1 billion people lack access to clean drinking water and more than double that number do not have proper sanitation, increases in prices will be – and in some countries are already proving to be – hugely controversial.
However experts argue that as long as most countries provide huge subsidies for water it will not be possible to change the wasteful habits of consumers, farmers and industry, nor to raise the investment needed to repair old supply systems and build new ones. And price rises can be managed so that they do not penalise the poorest.
Last Friday, the World Bank held a high-level private meeting about water in New York, at which higher prices were discussed. Days before that the OECD, which represents the world's major economies, issued three water reports calling for prices to rise. "Putting a price on water will make us aware of the scarcity and make us take better care of it," said Angel Gurría, the OECD secretary-general. It has also been a key theme at this week's meeting of industry leaders in Paris, hosted by Global Water Intelligence.
The discussion at the World Bank was raised by Lars Thunell, chief executive officer of the International Finance Corporation. "Everyone said water must be somehow valued: whether you call it cost, or price, or cost recover," said Usha Rao-Monari, senior manager of the IFC's infrastructure department. "It's not an infinite resource, and anything that's not an infinite resource must be valued."
Concern about dwindling water supplies has been rising with growing populations and economies. And with climate change altering rainfall patterns, experts warn that unless changes are made, up to half the world's population could live in areas without sustainable clean water to meet their daily needs.
Global Water Intelligence's 2010 market report estimated the industry needs to spend $571bn (£373bn) a year to maintain and improve its networks and treatment plants to meet rising demand - more than three times this year's projected spending.
At the same time, a major report last year by consultants McKinsey, paid for by a group of water-dependent global brands including SABMiller and Nestlé, said that most of the estimated "gap" in water in 2030 could be met from efficiency savings such as better irrigation and new showerheads.
However, highly subsidised prices are hampering both investment and efficiency, because private and public companies cannot collect enough water, nor persuade farmers, homeowners and businesses to make - and sometimes pay for - changes to reduce their water use, say the experts.
"We were in a vicious cycle," says Virgilio Rivera, a director of Manila Water, which took over water and sewage services in the city when the Philippines government passed a National Water Crisis Act in 1997. "Lack of investment; poor service; government can't increase the water rates because customers are dissatisfied; they are not paying, so low cash flows; so the government can't improve the service."
Huge opposition to price rises is expected however, especially as so many prices are set by elected politicians.
Even in Washington DC there has been an outcry over calls for prices to double over the next five years to help the city raise money to spend on its 76-year-old network of leaking lead pipes.
Obstacles include a long term "legitimacy" from providing free or very cheap water; and vested interests, says Rao-Monari, who cites the example of water vendors in India making big profits from desperate households.
The biggest concern though is the impact on the poorest households. There is evidence that they suffer most from the bad services of poorly funded water companies, because often they are not connected at all or have such bad services they are forced to rely on even more expensive water vendors.
In Manila, Manila Water increased bills from 4.5 to 30 pesos per cubic metre. At first there was resistance but by 2003 the company doubled connections from 3m to 6m, including 1.6m of the poorest squatters, leakage had been cut drastically, and pressure and quality had improved, said Rivera, one of the company's directors visiting Paris. Bills for the poorest households are now less than one-tenth of when they relied on vendors, and payment in the slum areas is 100%, said Rivera.
Some say step pricing can be used to protect a basic water allowance for drinking, cooking and washing – either for very low prices or for free, as it is in South Africa.
"I fully agree the water we need of hydration and minimal hygiene are part of the Human Rights declaration, but this is 25 litres of water [a day], which is the smallest part," said Peter Brabeck-Letmathe, chairman of food giant Nestlé and one of the most prominent global business leaders campaigning on water. More than 95% of water is used to grow food, for other household needs and for industry, he added.
Food prices should not have to rise as higher water bills could be offset by efficiency improvements, from irrigation, to new seeds, or even a changing pattern of what is eaten to favour less water-intensive ingredients, said Brabeck-Letmathe.
Others favour separating water supply from government's duty to take care of the most vulnerable. "Ideally utilities should not make any distinction between rich and poor," said Prof Asit Biswas, president of the Third World Centre for Water Management. "The moment you subsidise [someone's bill] people don't use water prudently."

Australia puts carbon trading scheme on hold

Kevin Rudd says the scheme will be delayed to 2013 because of parliamentary opposition

David Adam and agencies, Tuesday 27 April 2010 18.09 BST
The Australian government has shelved plans for an ambitious carbon trading scheme that was the cornerstone of a pledge to reduce the country's greenhouse gas emissions by up to a quarter by 2020.
Kevin Rudd, Australian prime minister, said the start of the scheme would be delayed to 2013 because of parliamentary opposition and slow progress on a new global climate change pact.
Rudd said the government would wait until the first phase of the Kyoto protocol expires in 2012 before implementing plans for one of the world's most comprehensive carbon-cutting regimes.
"That will provide the Australian government at the time with a better position to assess the level of global action on climate change," Rudd said.
The decision comes after the opposition Liberal party in December ousted its leader Malcolm Turnbull, who backed the trading scheme, and replaced him with Tony Abbott, whom critics have labelled a climate sceptic.
Plans for the scheme have been rejected twice in the Australian Senate, where the government is seven votes short of a majority.
The delay follows a set-back for carbon trading plans in the US, where a high-profile launch of proposed climate change laws was abandoned yesterday. The proposals had carbon trading at their heart but were put on hold when Lindsey Graham, a Republican and one of three senators behind the proposals, fell out with Democrats over immigration laws. The move puts a core Obama mission in jeopardy and further complicates international efforts to reach a deal on global warming.
The promise of an Australian emissions scheme helped propel Rudd to power in 2007, but public support has slipped. Another election is due this year.
Rudd said the Liberal party's decision to "backflip on its historical commitment to bring in a carbon pollution reduction scheme" had contributed to the delay. "It's very plain that the correct course of action is to extend the implementation date." He insisted his government remained committed to cuts in greenhouse gas emissions. "Climate change remains a fundamental economic and environmental and moral challenge for all Australians, and for all peoples of the world. That just doesn't go away," he said.
A spokeswoman for Penny Wong, climate change minister, said: "The blocking of the carbon pollution reduction scheme legislation by the opposition has caused delays and created uncertainties which will of course affect the budget."
Joe Hockey, conservative opposition treasury spokesman, said delaying the scheme made a mockery of Rudd's pledge that global warming was the "great moral and economic challenge of our time".
Hockey said the scheme had been shelved to improve the budget outlook, helping to improve the forecast AU$57.7bn (£34.6bn) deficit for the year to end-June 2010.
The Australian Greens, who control five of seven Senate cross bench votes the government needs to pass legislation, said the decision to abandon the emissions scheme meant the government should look at interim alternatives such as a levy on polluters.
"In the face of ever-stronger warnings from scientists, the government must not throw the baby out with the bath water and abandon any plans to put a price on carbon," said Christine Milne, deputy leader of the Greens.
Abbott, who has said it would be premature for Australia to adopt such a scheme ahead of other countries, told ABC News: "It seems the government has dropped its policy to deal with climate change because it is frightened the public think that this really is just a great big new tax on everything."
A new survey conducted by Auspoll for the Climate Institute and the Conservation Foundation found voter concern about global warming in Australia has slipped nine points since May 2009, but was still strong at 68%, with climate still an election issue.
Just 36% of voters believed Rudd was the best person to handle climate issues, a fall of 10% from February last year, while 40% said there was no difference between the government and the conservative opposition.