News Service from House Harris

Oppn outlines "cheaper, greener" ETS plan

CANBERRA, Aug 10 AAP - The federal opposition has come up with a new plan to tackle climate change - but it's too late to save the doomed emissions trading scheme.

As politicians returned to Canberra ahead of Tuesday's debate on the ETS in the Senate, Opposition Leader Malcolm Turnbull released what he says is a greener, cheaper way to cut dangerous greenhouse gases.

But the new proposal has been released so late it is not expected to change the vote on the ETS on Thursday.

The opposition is set to combine with the Australian Greens and crossbench senators to defeat the ETS.

Climate Change Minister Penny Wong labelled the opposition's plan a "mongrel" and said it was a distraction from the opposition's leadership woes and disarray on climate change.

She also said the government was determined to pass its ETS - warning this might have to happen "the hard way".

If the ETS is knocked back twice, the government can call an early election.

Mr Turnbull talked up the new proposal, saying it would save the government $49 billion and allow Australia to make a deeper cut in emissions. But he noted it was not official coalition policy.

Under the scheme an ETS would still be the main vehicle to reduce emissions, but the dirtiest part of the economy - electricity generators - would have a separate scheme that would impose lower costs.

Instead of paying for all their pollution, generators would pay only for emissions above a certain threshold.

That means household power bills would rise less steeply - by $44 a year instead of $280 under the government's scheme, although there would be less compensation available for the poor.

Frontier Economics, which modelled the scheme for the opposition and independent senator Nick Xenophon, says it would cost the economy 40 per cent less than the government's scheme.

The lower cost would free up money to spend on tackling climate change, largely by paying poor countries to cut emissions.

Australia would then ramp up its minimum target of reducing emissions by five per cent by 2020, to 10 per cent.

The alternative scheme would also permanently exclude agriculture and give more compensation to big-polluting companies.

"It's greener, it will also be cheaper," Mr Turnbull said.

The opposition would be ready to propose amendments to the ETS the second time it came before the Senate, probably later this year.

Deep public splits have plagued the coalition over emissions trading, so when Mr Turnbull was asked if he could convince his divided party room to adopt the proposal, he said: "We'll see."

"I'm not going to broadcast the way in which people may express views in the coalition party room."

Senator Wong was scathing of the proposal and said it was just a way for Mr Turnbull to try and "calm the farm" in the coalition.

"It is not a hybrid, it is a mongrel. It is not a credible alternative, it is a smokescreen," she said.

The proposal "has the distinct taste of magic pudding".

Giving special treatment to the electricity industry would transfer costs to taxpayers and to other sectors of the economy, she said.

However, Senator Wong reiterated that if Mr Turnbull put forward serious amendments which had been agreed to by his party, she'd consider them.

Senator Xenophon said the alternative scheme would allow for deeper cuts to greenhouse pollution in a way that was economically responsible.

The Greens said the opposition's proposal would not work and likened both major parties to dinosaurs scrapping over climate change.

The Australian Industry Group rejected increasing the minimum target for cutting emissions to 10 per cent.