By Rob Taylor
CANBERRA (Reuters) - Australia's parliament, distracted by allegations of abuse of power against the government, is unlikely to clear a landmark carbon trading scheme this week, a key upper house lawmaker said on Tuesday.
Prime Minister Kevin Rudd is demanding the conservative opposition leader apologize and resign for using a fake email to accuse him and his treasurer of doing favors for a car dealer who lent the prime minister an election campaign vehicle.
While the scandal is unlikely to claim political scalps, the Australian Greens, who hold the balance of power, said the heat from the row was distracting both the major parties from negotiations in the Senate on the Emissions Trading Scheme (ETS).
"I think the whole of the country has lost traction due to this squabble. We are dealing here with legislation in the Senate that is about the future of the planet," Greens leader Bob Brown told reporters outside parliament.
"All the prime minister and the leader of the opposition can do is look at their own future based on a false email and a second-hand ute (truck). It is not a primary matter for the nation," said an angry Brown.
The carbon trading scheme, a key plank in Rudd's 2007 election victory, is planned to come into effect by July 2011 and would be the world's most comprehensive emissions trading scheme.
The scheme aims to cover 75 percent of the nation's carbon emissions. The government is seeking to cut emissions by five percent by 2020 and up to 25 percent if developed nations agree on tough action at climate talks in Copenhagen in December.
The Senate began debating the emissions legislation on Monday but with little sign the package of 11 bills will pass before the onset of the parliament's six-week winter break on Friday.
VOTE DELAY LIKELY
A vote on the scheme looks likely to be delayed until August, with the opposition-dominated Senate locked in debate about how to deal with the laws and conservatives holding the largest bloc looking to deprive Rudd of any trigger for early elections.
Green senators want a 40 percent cut in emissions by 2020, while conservative senators want the legislation delayed until after Copenhagen.
The government needs only an extra seven votes to get the laws through the Senate, but the opposition, five Greens and two independents all plan to vote against the current plan.
"We are dealing with billions of dollars of public money and it's as if it doesn't exist. We are dealing with the impact of climate change on this nation, on business, on employment, on the future of the country," Brown said.
Markets have not reacted to the uncertainty of the emissions legislation or what Australian media have called "Utegate," with business expecting the Senate to reject the emissions scheme or put it on hold until after Copenhagen.
Opponents have accused Rudd of seeking a reason to call a snap election in early 2010, pointing to Labor's refusal to negotiate and risking a Senate rejection that if repeated twice over a three month gap would hand Rudd an early poll trigger.
(Editing by Michael Perry and Sanjeev Miglani)