CANBERRA - Australia's key policy to fight global warming limped closer to defeat on Monday with parliament set to delay or reject the government's carbon emissions trade scheme, raising the chances of an early election.

Defeat or further delays to the carbon-trade laws will be a major embarrassment to Prime Minister Kevin Rudd, who is in the United States to discuss climate policy with President Barack Obama ahead of December 7-18 U.N. climate summit in Copenhagen.

Australia is the developed world's biggest per capita emitter of greenhouse gases, blamed for global warming. The government aims to cut emissions by 5-25 percent by 2020 from 2000 levels, with the size of the cut depending on the global position agreed at Copenhagen.

The climate change debate in Australia is being watched by other countries, including the world's second-largest greenhouse gas emitter, the United States, which has had its own difficulties enacting climate-change legislation.

In Sydney, Tibet's exiled Buddhist spiritual leader the Dalai Lama also urged governments to take climate change seriously, and to put global interests ahead of domestic concerns.

In some cases in order to protect global issues, some sacrifice of national interest (is needed), he told reporters.

Australia's hostile Senate rejected the carbon-trade plan in August and a second rejection, or postponement to early 2010, would give Rudd the right to call an early election.

Many opposition Senators are climate change skeptics and oppose the emissions trading scheme (ETS). Green senators also oppose the ETS, arguing its CO2 reduction targets are too low.

The Senate on Monday was still debating the carbon bills and may eventually vote to defer the draft laws until February.

This is just another tactic by those people who don't want action on climate change trying to avoid action, Climate Change Minister Penny Wong told Australia radio on Monday.

The government needs seven opposition votes in the Senate to pass its laws. Wong said senators had already had plenty of time to examine the laws, which have been in the Senate since March.

Rudd has said repeatedly he does not want to call an early election and plans to run his full term to the end of 2010.

But the promised carbon trade scheme was a key promise from Rudd's 2007 election victory, and there is increasing speculation he will only pass his plan in a joint-sitting of both houses of parliament after a special double dissolution election.

Political analyst Nick Economou, from Melbourne's Monash University, said there was now a 50 percent chance of an early election. Bookmakers Centrebet also said the odds of an early election were the same as the odds against.

Rudd's government remains well ahead of the opposition, and would win an election with an increased majority if the poll figures were carried through to election day.

An early election is unlikely to have implications for other key economic policies and financial markets remain unconcerned about the possibility. However, further delays to the carbon trade laws will increase uncertainty for big business.
CLIMATE SCEPTICS

Many opposition lawmakers say they do not believe human activity is responsible for global warming, while others want the laws delayed until after the Copenhagen summit and until other major polluters make firm commitments to curb emissions.

The opposition is in open revolt over the ETS, with leader Malcolm Turnbull facing a leadership challenge on Tuesday after he decided his party should support the package.

Opposition skeptics are now likely to attempt a filibuster and drag the debate on until at least Tuesday, when they hope a new leader will reverse Turnbull's policy.

But Turnbull revived hopes the laws could still pass when he declared he would not stand aside as leader, and claimed support from his mostly likely leadership rival, Joe Hockey.

This debate has been going on for years and years and years. It is manifestly in the national interest for Australia to take action to cut its CO2 emissions, he said.

A Nielsen poll in the Sydney Morning Herald newspaper on Monday said 66 percent of those polled supported a carbon-trade scheme for Australia, while only 25 percent were opposed.

The poll also found 57 percent would support Rudd if he chose to call an early election on climate policy.

(Editing by Michael Perry and Bill Tarrant)

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