Bill Shorten to announce Labor's climate change policy

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"Labor will take real action on climate change, by working with industries to bring down pollution, protect competitiveness and jobs, and build the industries of the future", the action plan said.

Agriculture and electricity generators will be exempt from the scheme and a $300 million fund will help trade-exposed industries like steel, aluminium and cement manufacturing to remain internationally competitive.

Labor's climate policy extends the coalition's "safeguard mechanism" that limits pollution by big industries.

"There will be no carbon tax, carbon pricing mechanism, or government revenue", Opposition Leader Bill Shorten said.

The government has attacked this aspect, with Prime Minister Scott Morrison saying it would force Australian business to spend money on "carbon credits for Kazakhstan".

"There's an issue obviously in terms of whether. those who have a compliance obligation in Australia will even wish to go outside of Australia if they're going to be paying a higher price than what they can source domestically", Carbon Markets Institute deputy chair Elisa de Wit told AAP.

Opposition climate change spokesman Mark Butler disagreed, saying Australian companies were allowed to trade in every other kind of global market.

"We allow business to trade in every other robust global market, why on earth would we not allow them to trade in worldwide carbon markets - provided, of course that they're robust and they're credible", he said.

Business across the board told Labor they wanted to expand the safeguard mechanism rather than start from scratch.

"We will need to see the details because any sudden or significant change in policy could have unintended consequences at a time when industry is already struggling with high costs", she said.

If they pollute more than that they must buy offset credits to surrender to government.

The mechanism, which now applies to 140 companies, sets a baseline of emissions for businesses.

The new safeguard mechanism will apply to businesses that produce more than 25,000 tonnes of direct Carbon dioxide emissions a year - an estimated 0.01 of all businesses - a big reduction on the current level that applies to polluters emitting more than 100,000 tonnes.

Labor will also reveal that, unlike the Coalition, it will not use carryover credits from the Kyoto protocol to meet Australia's emissions target under the Paris agreement. The credits can be used for sale in a trading scheme, which is expected to be linked with the electricity sector and will be covered by a separate regulatory regime.

The safeguard mechanism now applies to businesses with direct emissions of more than 100 kilo tons of carbon dioxide, but Labor's policy plans to cut that threshold to 25 kilo tons, which means around 250 companies will be covered.

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