CANBERRA, May 17 (Reuters) - Australia&${esc.hash}39;s government ruled out setting its new carbon tax at A${esc.dollar}40 (${esc.dollar}38) a tonne on Tuesday after economists said the high price would be needed to force a switch from coal to gas-fired electricity.
Research for the government conducted by Deloitte and published by the Sydney morning Herald newspaper, said black coal would remain the cheapest source of electricity unless the price of carbon emissions rises quickly to A${esc.dollar}40 a tonne.
The influential Greens, whose support is needed for the government to pass its carbon tax, said they would push for a higher price, but Climate Change Minister Greg Combet said A${esc.dollar}40 a tonne was too high.
"A starting price will be well south of A${esc.dollar}40 a tonne," Combet told Australian radio, ahead of a meeting of a multi-party committee which is working on details of the proposed tax.
The government&${esc.hash}39;s key climate adviser Ross Garnaut has proposed a carbon price of between A${esc.dollar}20 and A${esc.dollar}30 a tonne, to be levied on about 1,000 of Australia&${esc.hash}39;s biggest polluting companies from July 1, 2012.
The carbon tax has become a key political headache for Prime Minister Julia Gillard and her minority government, which relies upon support from the Greens and three independents to maintain a one-seat majority in parliament.
The conservative opposition has a strong lead in opinion polls, partly on the back of its strident opposition to the carbon tax and warnings it will force industries to close, lead to job losses and push up prices.
The government wants the tax to start in July 2012, with a move to a full emissions trading scheme three to five years later, as the key plank of its goal to reduce emissions by 5 percent of year 2000 levels by 2020.
Australia, the world&${esc.hash}39;s biggest coal exporter, accounts for about 1.5 percent of global emissions but is one of the world&${esc.hash}39;s highest per-capita polluters because 80 percent of its electricity comes from coal-fired power stations.
The multi-party committee of government, Greens and independents, will decide details of the carbon tax, including compensation for power generator, big exporting industries and householders, by the end of June.
Greens senator Christine Milne, who is on the multi-party committee, said final decisions on the carbon tax would take some time.
"I certainly recognise that you are going to need a price at A${esc.dollar}40 or more to shift from coal to gas and then a higher price still from gas to the renewables," Milne told Australian radio.
(${esc.dollar}1=A${esc.dollar}0.94) (Reporting by James Grubel; Editing by Ed Davies)
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