Australia has passed a controversial pollution tax in a sweeping and historic reform aimed at lowering carbon emissions.

The Senate approved the Clean Energy Act by 36 votes to 32, requiring Australia's coal-fired power stations and other major emitters to 'pay to pollute' from 1 July, 2012.

Prime Minister Julia Gillard said it was the culmination of a "quarter of a century of scientific warnings, 37 parliamentary inquiries and years of bitter debate and division."

"Today Australia has a price on carbon as the law of our land," she said.

"Today we have made history - after all of these days of debate and division, our nation has got the job done."

Ms Gillard said the scheme - which will levy a price of Aus$23 (€17) per tonne on carbon pollution before moving to an emissions trading scheme in 2015 - would begin to address "the devastating impacts of climate change".

Australia was hit by floods and cyclones earlier this year, having just emerged from drought.

Scientists have warned climate change will likely make extreme weather events more frequent.

Ms Gillard said the reforms - which include investments in renewable energy sources - would result in Australia cutting its carbon emissions by 160m tonnes in 2020 - equivalent to taking 45m cars off the road.

Only New Zealand and the European Union have taken comparable economy-wide action by introducing cap-and-trade schemes, and the tax will put mining-driven Australia at the forefront of efforts in the Asia-Pacific region.

Today's vote caps a tumultuous period in Australian politics, largely centred on how the nation - which is among the world's worst per capita polluters - should tackle carbon emissions linked to global warming.

Former prime minister Kevin Rudd harnessed an unprecedented wave of popular support for climate change action in 2007, winning election in a landslide after campaigning to ratify the Kyoto Protocol and take other green measures.

However, his plans were frustrated by entrenched conservative opposition which led to him shelving a proposed emissions trading scheme, damaging his credibility.

He was ousted by Ms Gillard in a Labour party-room coup in 2010.

Ms Gillard went to the subsequent election promising there would be no carbon tax, but later changed her view, saying it was a necessary first step towards a flexible carbon pricing scheme.

Australia is heavily reliant on its coal exports, and thousands of people have rallied against the levy which, they argue, will raise living costs, cut jobs and, ultimately, be ineffective.