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Carbon price passed

The Government's contentious carbon tax has passed into law 36 votes to 32 after heated debate in the Senate.

TAXING TIMES: The road through the Senate

Q AND A: What the carbon tax means for you.

EMITTERS: Who will pay

IMPACT: How a carbon price affects industries

ANALYSIS: Carbon price to unlock $13b for clean energy

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How much compensation will you get? Use our carbon tax calculator to find out.

Labor forced an early vote today despite the Opposition trying to extend debate. Opposition senators moved a number of amendments and procedural motions in a bid to stall the vote.

But with the Greens joining with Labor, the bill was always destined to pass and the public galleries erupted into applause about 12.45pm when that happened.

It came until law with Climate Change minister Greg Combet watching from the gallery.

Before the vote Nationals Senate Leader Barnaby Joyce told Labor it was not acting in the best interest of the Australian people.

"You have deserted them for Dr Bob Brown," he said.

But Senator Brown, the Greens Leader, said future generations would thank the Senate for what it did today.

"People 50 and 500 years from now will thank us for the passage of this legislation,'' he said.

He said it was a "green-letter day".

"It's one that will echo through the ages," he said.

Finance Minister Penny Wong lead the Government's push in the Senate and said today's vote was an historic moment.

"This is an historic reform," he said.

"This is a Labor Government that is determined to get big things done, to do what is right by the Australian people."

Prime Minister Julia Gillard issued a statement saying the passing of the laws "secured a clean energy future for all Australians".

"For the first time, Australia's biggest polluters will have to pay for every tonne of carbon pollution they emit," she said.

The carbon tax and emissions trading scheme would cut carbon pollution by at least 160 million tonnes a year in 2020 - the equivalent to taking 45 million cars off the road.

"We will do this by putting a price on pollution, fostering renewable energy technologies, encouraging energy efficiency and creating opportunities to reduce pollution on the land," she said.

"Our Clean Energy legislation will also deliver fair and generous assistance to householders while giving certainty to business and investors about Australia's move to a low pollution economy."

Treasurer Wayne Swan said the economy would continue to prosper, with 1.6 million jobs to be created by 2020.

"For most people, the Gillard Government's comprehensive household assistance package will cover, and in many cases exceed, any price rises passed on by businesses," he said.

Climate Change Minister Greg Combet said the country's 500 biggest polluters would pay $23 a tonne for the pollution they emitted from July next year. This would move to a flexible price, determined by the market, after three years.

"The initial fixed price stage will provide stability and predictability. This will give businesses time to get used to the new system, to understand their obligations and to start planning ways of reducing their pollution," he said.

"Passage of the legislation means the Government will now focus on implementing the carbon price and delivering the substantial household, industry, renewable energy, innovation, land sector and energy efficiency measures contained in the Clean Energy Future Plan."

After the vote, Senator Joyce said he and his colleagues would "gird our loins" and continue the campaign to overturn the laws.

"The Australian people have a right to have a referendum on this ... it is still coming, it is an election," he said.

"[The carbon tax is] just going to make people poorer."

Greens Senator Christine Milne said it was worth her party effectively blocking Labor's earlier attempt at implementing an emissions trading scheme, former prime minister Kevin Rudd's carbon pollution reduction scheme.

She said the new legislation had a higher target and an independent climate authority that would determine how those targets were met.

"The old legislation put a cap on the level of ambition. This opens it up and says it needs to be science based," she said.

Opposition Senate Leader Eric Abetz called on Labor to support the Coalition in repealing the legislation in two years time, if it won government.

"The Australian people are entitled to be heard. We will give them that voice at the next election and if they give us the privilege of forming the next government of this nation then we will be repealing this legislation and the question for Labor is will they join with us," he said.

Opposition Leader Tony Abbott, who is on his way to Britain for a conference with conservative political leaders, issued a statement after the tax become law, saying Prime Minister Gillard had betrayed the Australian people.

"The carbon tax is a toxic tax based on a lie from a Prime Minister who promised six days before the last election 'there will be no carbon tax under the government I lead','' he said.

"This new tax is a blow to the future of Australian manufacturing and a new burden for families struggling under cost of living increases. The tax will increase but the so-called compensation won't."

He said that the Government would export jobs and emissions overseas if no other nation acted.

"At the next election, I will seek a mandate from the Australian people to repeal this tax,'' he said.

Nationals Leader Warren Truss issued a statement saying that Australia, at the behest of the Greens, was "going it alone to hang the millstone of the world's biggest carbon tax around the necks of very business and every family".

"Bob Brown's plan to bog down growth and development in this country is now enshrined. His agenda to reduce Australia's carbon dioxide emissions by closing down Australian industry and destroying jobs is now law,'' he said.

Ms Gillard said the new laws came after a quarter of a century of scientific warnings, dozens of parliamentary inquiries and much division;

"Today's vote means that the hard work now begins to cut carbon pollution,'' she said.

It would also mean that Australia would begin to address the devastating impacts of climate change, including more severe floods and droughts.

"This reform is right for our country's future. It is the right thing to do. It is the most effective way that we can cut carbon pollution and create a clean energy future. So of course we will keep explaining to people what it means,'' she said.

She also dismissed Mr Abbott's promise to repeal the legislation if he won power.

"Let's be serious here, every living Liberal leader supports a price on carbon, including the current Leader of Opposition if truth be told," she said.

with staff reporters