Australian Greens set to be kingmaker after poll

CANBERRA (Reuters) - Australia's Greens party is on course to win control of the upper house Senate at elections that loom within weeks and will seek to push environmental policies to the fore of the next government's agenda.

The Labor government is expected to snare a narrow victory at the election, possibly in late August, but regardless of who wins the poll the next government will probably rely on the Greens to pass laws on everything from the economy to the environment.

And Greens leader Senator Bob Brown has flagged that he will be expecting green policies, in particular a carbon price, in exchange for his party's support.

But the Greens and a future Labor government are set for a tumultuous relationship after Gillard again said she would not consider a carbon price until 2012.

"The pricing of carbon, I think, is best done through a market-based mechanism, the Carbon Pollution Reduction Scheme, and the 2012 timeframe stands there," Gillard said on Wednesday.

"Individuals in this country want to do something to reduce their own carbon footprint. I believe the nation wants to reduce its carbon footprint, so we'll be talking about that and speaking about what we can do in the lead up to a decision in 2012."

Brown called the delay in introducing a carbon price a climate policy failure.

"This is really a failure of action by a future Gillard government and it has been flagged to the electorate before the election," Brown said on Thursday.

"Business needs the certainty of a carbon price, the community needs the certainty of action on climate change...but they are not going to get it from Julia Gillard."

VOTERS WANT ACTION ON CLIMATE CHANGE

Gillard replaced former leader Kevin Rudd last month after the Labor party feared electoral defeat, with voters deserting the government over its postponement of a key climate policy.

Rudd's two failed attempts to have the current Senate pass carbon trading laws and then his deferral of the scheme until 2011 was the tipping point for many voters who elected Labor in 2007 on its pledge to tackle climate change.

In contrast, conservative opposition leader Tony Abbott is opposed to introducing a carbon trading scheme if elected.

So, three years after the last election, the environment is again a major poll issue, with Labor and the Liberal-Nationals again offering voters starkly different choices.

"It does appear we are heading for an early election. The Greens are very ready for that. And climate change is going to be high on the agenda," Brown told Reuters in an interview.

The Greens now hold five seats in the 76-seat Senate, but Brown believes the Greens could pick up two or three more.

If the Greens end up with the balance of power in the new Senate as expected, Brown points out his party has a record of negotiating in good faith and not being obstructionist.

The Greens were crucial to amending and passing economic stimulus measures worth more than A$52 billion in early 2009, to head off recession during the global financial crisis.

WOOING GREEN VOTERS

With the Greens attracting well above 10 percent of the vote in some inner city electorates, the government and opposition will be keen to woo those green voters back.

In her first news conference as leader, Gillard said it was inevitable that Australia would adopt a carbon price to try and reduce emissions, but vowed to seek a new national consensus.

Brown has written to Gillard to re-affirm a Greens plan for an interim carbon tax of A$23 a tonne until an emissions trade scheme can be passed. The Greens also want stronger cuts in emissions, beyond the government's minimum 5 percent cut by 2020.

"If they do (have the balance of power), they will be able to force the issue and Labor will have to negotiate and the emissions trading laws will be back on track in a stronger form," said an analyst who spoke on condition of anonymity.

Brown said Gillard was likely to promote new clean energy initiatives ahead of the election, but more was needed to curb carbon emissions, which are blamed for global warming.

The Australian parliament in June revised renewable energy laws to unlock billions of dollars in clean energy investment and bolster the government's green credentials ahead of elections.

The laws lock in a 20 percent renewable energy target by 2020 and give new certainty to up to $19 billion worth of clean energy projects.

Brown said a carbon price was only one item on his agenda. He also wants an end to logging in old growth forests, particularly in his island state Tasmania, where forestry is a divisive issue.

MINING TAX IN BALANCE

The fate of the government's new 30 percent mining tax deal, which ended a bitter three-month row with global miners BHP Billiton, Rio Tinto and Xstrata, rests wth the Greens.

The opposition has said it will reject the tax. The Greens have so far refused to endorse the deal, demanding that financial details be examined by the next parliament when the new tax comes before the Senate, possibly by mid-2011.

But Brown has pushed for some proceeds of the tax to be used for a new sovereign wealth fund to drive nation-building projects such as a high-speed rail service linking Sydney and Melbourne.

Analysts warn the Greens will have to be careful how they wield power to achieve action on climate change.

"The Greens in parliament are going to have to find a way not to get to nirvana in three days' flat," said Greg Bourne, CEO of WWF Australia, but underlined the opposite risk, too.

"The Greens are very well aware that if they compromise too much then they will be seen as a spent force. The Greens have got to play a very canny game," Bourne told Reuters.

(Additional reporting by David Fogarty; Editing by Michael Perry)