Australia PM: to act on climate when economy ready

CANBERRA (Reuters) - Australia would take action on climate change when the economy was ready, but would not set up a carbon emissions trade scheme until after 2012 at the earliest, Prime Minister Julia Gillard said on Friday.

Announcing her climate policy ahead of Australia's August 21 elections, Gillard stood by a government decision in April to defer the emissions trade scheme until at least the end of the current Kyoto Protocol period in 2012.

Gillard also announced a new 150-member body would be set up to build community consensus on the policy in Australia, and said new coal-fired power stations in Australia would now need to have the ability to capture and store carbon emissions.

"I will act when the Australian economy is ready and when the Australian people are ready," Gillard said in a campaign speech in Brisbane.

Climate change and emissions trading is one of the most sensitive policy issues in Australian politics.

Former Prime Minister Kevin Rudd's decision to delay a carbon trading scheme prompted a slide in his poll support and a surge toward the Greens, and was a key factor in the party room coup which saw Gillard replace him on June 24.

Opinion polls show Gillard has turned the ruling Labor's fortunes around and the latest Reuters Poll Trend shows she is on track to win the election with an increased majority.

The Greens and environment groups have been quick to criticize Gillard's climate policy, saying it adds further delays and uncertainty over action to fight global warming.

"This is a complete failure of leadership by the Prime Minister," said Greens Senator Christine Milne, who added Australia would now have no price on carbon emissions until at last 2013.

Greenpeace said the new policy would waste time and drag Australian climate policy backwards.

"Julia Gillard is failing to move Australia from a pollution dependent economy to a safe and resilient clean economy," Greenpeace head of campaigns Stephen Campbell said.

Australia, the world's largest coal exporter, accounts for about 1.5 percent of global emissions, but is one of the highest per capita emitters due to a reliance on burning coal to generate about 80 percent of domestic electricity.

Australia has also passed laws to ensure 20 percent of electricity comes from renewable energy by 2020.

The emissions trade scheme had planned to force 1,000 of Australia's biggest companies to buy permits for every tonne of carbon produced.

(Reporting by James Grubel; Editing by Ed Davies)