Independent senator Nick Xenophon has teamed with the Coalition to fund modelling of an alternate Emission Trading Scheme (ETS).

This comes following the successful motion passed in Parliament last week by the senator which saw the ETS bill vote delayed until August when sitting resumes.

Xenophon indicated to Neos Kosmos English Edition (NKEE) that he could not support the legislation in the current form and was hoping to negotiate a more effective plan with the Government, the Coalition and the Greens.

“The scheme, as it currently stands fails to address crucial environmental issues, given its inherent design flaws and failure,” he said.

“We need stronger environmental targets and a scheme that will not have the extreme economic impact the government’s current plan will bring about.”

The current ETS scheme scheduled for 2011 if passed is based on setting a cap on the amount of pollution that a sector can emit. Companies will be provided with carbon credits, which can only be expanded by buying carbon credits from other companies.

The cost to the industry, which is likely to be passed onto consumers is in the tens of billions, something the Xenophon does not think justifies an emissions target reduction of just five per cent.

The senator is considering an intensity based emissions scheme which unlike the Government’s scheme will not tax the industry, including greener industries as heavily.

It aims to charges companies based on the amount of carbon emitted compared to others in the industry, and also sets a goal for each sector. Another alternative is a combination of this and the Government’s scheme. However the Government looks set to reject the modelling proposals on August 13 when the ETS bill debate resumes.

“We (have already) put forward the most comprehensive modelling that Australia has ever done…based on consultation, discussions with community, discussions with industry,” said Climate Change minister Penny Wong.