Rudd, who is campaigning for a strong global agreement at next week's Copenhagen climate summit, wants emissions trading to start in Australia in July 2011, covering 75 percent of emissions in the developed world's bigger per capita emitter. 

Rudd met U.S. President Barack Obama in Washington on Monday to discuss climate change. The United States is closely watching Australia's debate and a political agreement on carbon trading in Australia would help garner support for action from other countries. But Australian opposition leader Malcolm Turnbull's support for the laws, which would enable the government to get them through the upper house Senate, has sparked a leadership challenge that could see Turnbull ousted and support for the laws withdrawn. "We don't control the numbers, but it is time this legislation was passed," junior Climate Change Minister Greg Combet told Australian radio, adding the Senate would be given enough time to deal with the laws. 

Rudd will play a key negotiating role in Copenhagen. He has promised Australia will cut emissions by between five and 25 percent by 2020, based on year 2000 levels, with the deeper cut dependent on a strong global agreement. Rudd's carbon trade plan will cover around 1,000 of Australia's biggest polluting companies, who will need to buy or receive free permits for every tonne of carbon they emit.

Turnbull survived a leadership challenge 48 votes to 35 on Nov. 25. If he survives a second challenge in a week, his party would be certain to support the government laws in the Senate, although many opposition lawmakers may defy their leader. 

If Turnbull is replaced by his treasury spokesman, Joe Hockey, opposition lawmakers are likely to be given a free vote, with up to 12 opposition Senators supporting the carbon scheme and ensuring the government will pass its bills. But if leading conservative Tony Abbott is elected, the opposition is likely to reject or postpone a final vote on the carbon trade scheme, giving Rudd a legal trigger which will allow him to call an early election. Rudd has regularly said he does not want an early election and would prefer elections to be held on time in late 2010.

**Reporting by James Grubel