Australia's parliament passed landmark laws to impose a price on carbon emissions on Tuesday in one of the biggest economic reforms in a decade

The scheme's impact will be felt right across the economy, from miners to LNG producers, airlines and steel makers and is aimed at making firms more energy efficient and push power generation towards gas and renewables.

Australia accounts for just 1.5 percent of global emissions, but is the developed world's highest emitter per capita due to a reliance on coal to generate electricity.

'This is a very positive step for the global effort on climate change. It shows that the world's most emissions-intensive advanced economy is prepared to use a market mechanism to cut carbon emissions in a low-cost way,' said Deutsche Bank carbon analyst Tim Jordan.

The vote is a major victory for embattled Prime Minister Julia Gillard, who staked her government's future on what will be the most comprehensive carbon price scheme outside of Europe despite deep hostility from voters and the political opposition.

The scheme is a central plank in the government's fight against climate change and aims to halt the growth of the country's growing greenhouse gas emissions from a resources-led boom and age-old reliance on coal-fired power stations.

It sets a fixed carbon tax of A$23 ($23.78) a tonne on the top 500 polluters from July 2012, then moves to an emissions trading scheme from July 2015. Companies involved will need a permit for every tonne of carbon they emit.

'Today marks the beginning of Australia's clean energy future. This is an historic moment, this is an historic reform, a reform that is long overdue,' Finance Minister Penny Wong told the upper house Senate as she wrapped up the marathon debate.

Australia has been debating a carbon price scheme for a decade and through 37 parliamentary inquiries, with the legislation instrumental in the 2007 fall of former conservative prime minister John Howard and Labor's Kevin Rudd in 2010.

The laws will see Australia join the European Union and New Zealand with national emissions trading schemes. California's starts in 2013, while China and South Korea are working on carbon trading programmes. India has a coal tax, while South Africa plans to place carbon caps on its top polluters.

The government hopes securing the carbon price laws will help re-ignite the push for a global agreement to curb emissions and fight global warming ahead of a international talks in Durban in December.

The carbon price will impose a cost on every tonne of carbon emitted, giving companies a financial incentive to curb pollution, and will help Australia reach its goal to cut emissions by 5 percent of year 2000 levels by 2020.

Farmers will be exempt from the scheme, but will be able to cash in by selling carbon offsets under separate laws for a carbon farming initiative.

The package of 18 new laws sets up the carbon price as well as billions in compensation for export-exposed industries and local steel makers, as well as personal tax cuts for 90 percent of workers, worth an average A$300 a year.

Emissions-intensive trade exposed industries such as aluminium, zinc refiners and steel makers, will receive 94.5 percent of carbon permits for free for the first three years of the scheme. - Reuters