* Carbon price only way to cut emissions-govt
* Australians reluctant to tackle climate change, despite extreme weather
* Australia must decouple economy from polluting energy-govt
* Greens say energy, climate policies contradictory (Updates throughout, pdf on extreme weather, changes dateline, byline)
By Michael Perry
SYDNEY, Feb 9 (Reuters) - Soaring carbon emissions mean Australia must put a price on carbon and invest more in clean energy to ensure a growing economy does not have to mean growing fossil-fuel pollution, the climate change minister said on Wednesday.
But the government faces continued opposition to its climate policy despite extreme weather battering Australia, leaving behind a $10 billion disaster bill and major export commodities still limping back into full operation.
Australia has weathered deadly floods in three states and a massive category 5 cyclone Yasi in recent weeks, linked by some to climate change, yet Australians remain reluctant to tackle the issue, due to a fear of higher power and fuel bills.
"We need to get our pollution levels down and drive investment in clean energy," Climate Change Minister Greg Combet told reporters. "The only major reform that is going to get us on that path...is the delivery of a carbon price."
"Our economy as it grows is still very closely linked and drives growth in pollution. The successful economies of the future are going to decouple their pollution growth from their economic growth, and that's the challenge we've got."
The government has failed three times to pass its climate policy and will seek for a fourth time in 2011 to put a price on carbon to lower greenhouse gas emissions in one of the world's highest per-capita carbon polluting nations.
The latest emissions projections, released by the Climate Change Department on Wednesday, forecast Australia would produce 690 million tonnes of carbon dioxide equivalent by 2020, which represents a 24 percent increase on emissions in 2000.
The projection is higher than 12 months ago.
Australia's economy is powered by fossil fuels, with 80 percent of electricity generated by coal-fired power stations.
In 2010, electricity accounted for 36 percent of emissions, agriculture and direct fuel combustion 15 percent each and transport 14 percent.
Strong international demand for Australia's coal and gas will see a marked rise in emissions unless more action is taken, said the climate department report.
The government has pledged to cut emissions by at least five percent from 2000 levels by 2020, less ambitious than the European Union pledge of cutting emissions by 20 percent from 1990 levels by 2020. It would mean reducing emissions by 160 million tonnes.
Combet said without a price on carbon such cuts were unrealistic, requiring a 75 percent cut in emissions from power generation as the economy annually grows by about 3 percent.
GREENS SAY ENERGY/CLIMATE POLICIES CONFLICTING
Analysts and the government say the longer it takes for a market price on carbon, the harder and costlier it will be to achieve the target.
Fierce political and business opposition fearing higher fuel and power bills has already delayed plans for carbon pricing, with the government shelving a national emissions trading scheme after it was repeatedly rejected by parliament last year.
The government is currently examining an interim carbon tax and has pledged to take action on climate change in 2011.
The government relies on one Green and three independent MPs for a one-seat majority and all four are in favour of taking action on climate change, boosting the government's chances of finally passing its climate policy in the second half of 2011.
The climate department said emissions growth over the next decade would be driven by strong export demand for Australian coal and gas.
"Fugitive emissions from coal mines and oil and gas projects, as well as direct fuel combustion emissions from LNG projects, account for almost half of the growth in Australia's total emissions from 2010 to 2020," it said.
The Australian Greens party said a government-endorsed expansion in fossil fuel extraction was producing a blow-out in greenhouse pollution.
"At some point the government will have to confront the reality that its energy policy and climate policy are on a collision course," said Greens Senator Christine Milne. (Additional reporting by James Grubel in Canberra; Editing by)
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