Australia’s parliament rejected a plan for the world’s most ambitious emissions trade regime on Thursday, bringing the nation closer to a snap election as early as November.

Kevin Rudd, the Labor prime minister, won power in 2007 after promising to take a leading role on climate change. But the Senate on Thursday defeated the carbon trading scheme legislation after the opposition Liberal/National party coalition, Greens and independent senators voted it down. Labor has no majority in the Senate.

Australia had planned to introduce its carbon trading scheme in mid-2011 and had set a mandatory cut in carbon emissions of 5 per cent by 2020 compared with 2000 levels. It also set a highly conditional upper limit of 25 per cent in the unlikely event of international agreement on aggressive emission cuts at the Copenhagen climate conference in December.

But the Greens had argued for deeper cuts, while the coalition has called for the vote to be delayed until after the Copenhagen summit.

Before the vote, Penny Wong, climate change minister, called it a “day of reckoning”.

The government has vowed to reintroduce the legislation this year. If the Senate rejects it a second time, after a three-month interval Mr Rudd would have the authority to dissolve both houses of parliament and call an election.

Mr Rudd attacked the Liberal party on Thursday for being climate change sceptics. “They are absolutely demonstrating themselves as being prisoners of the past, prisoners of their own internal party disunity,” Mr Rudd said.

The opposition coalition would almost certainly lose an early election amid growing frustration in Australia over its intransigence on climate change.

Malcolm Turnbull, opposition leader, has polled poorly in recent months and has been attacked by the government for failing to present a clear policy alternative. Mr Turnbull, a former environment minister, has also had to contend with disunity within his ranks over the carbon trading scheme legislation.

A poll out this month from Roy Morgan found that 55 per cent of Australians approved the government’s carbon trading scheme legislation, with fewer than a quarter saying it did not go far enough.

Australia is the developed world’s highest-polluting country per capita because it relies heavily on coal for its energy needs.

Nick Minchin, leader of the Liberal party in the Senate, welcomed the rejection of the bill. “Labor’s bill would have cost thousands of jobs, reduced Australian living standards, substantially raised the price of everyone’s electricity and damaged the Australian economy, all for absolutely zero environmental gain,” he said.

“The government should now put this damaging bill in the deep freeze and wait until after we see the outcome of the Copenhagen conference and the US Senate debate on emissions trading before resurrecting its discredited legislation.”

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