(Reuters) - Australia's government has reached a compromise with independent senators and a key opposition party to secure support for a A$2.5 billion ($2.2 bln) fund to cut greenhouse gas emissions, media reports said Wednesday.
The ruling Liberal party has secured backing from the Palmer United Party (PUP) and independent senators Nick Xenophon and John Madigan, with details to be released later on Wednesday, according to the Guardian and the Australian Financial Review.
A compromise would put an end to a years-long debate on how Australia can meet its target of cutting greenhouse gas emissions to 5 percent below 2005 levels by 2020.
In August, the government dismantled a broad carbon pricing scheme put in place by the previous Labor government, saying it was too expensive.
Under the policy, known as the Direct Action Plan, the government would set up a $2.5 bln Emissions Reduction Fund that would pay big polluters to cut their emissions.
According to the Guardian, the government has accepted proposals by Senator Xenophon to put in place a "safeguard mechanism" to ensure emissions in the coal-dependant nation do not rise under the new scheme.
Details of the safeguard mechanism will be panned out later, but is expected to include some form of penalty for companies that fail to meet government-set benchmarks.
But according to the reports, the government has rejected proposals to set aside A$500 million to buy U.N.-issued carbon offsets from abroad to ensure the target is met.
The Palmer United Party has backed the compromise because the government has agreed to review its plan to design an emissions trading scheme that would only enter into force when other large emitters, such as China and the United States, have similar policies in place, the Guardian reported.
(Reporting by Stian Reklev in Beijing; Editing by Jeremy Laurence)