The Australian Government will revise its carbon price forecasts in the upcoming Federal Budget in May following the collapse of the European Union carbon price to less than $4 a tonne.
The EU carbon price is in stark contrast to Australia's fixed carbon price of $23 a tonne which will remain in place until 2015, the year that Australia will link its emissions trading scheme with Europe.
The collapse occurred when the European Parliament rejected a proposal to postpone the sale of 900 million permits.
Prime Minister Julia Gillard said yesterday there would be no change to plans to transition from a fixed carbon price to a floating price in 2015 despite the drama unfolding in the European Union.
When asked about the impact the EU price collapse would have on Australian budgets, Climate Change Minister Greg Combet said it was too early to make predictions about something that is two years away.
"We will continue with our plans to link with the European emissions trading scheme from July 1, 2015, which is still over two years away, but this year's budget, as is usual practice by Treasury, will include a revised forecast for a carbon price in 2015/16 in Australia," he said.
Federal Opposition Leader Tony Abbott is committed to abolishing the carbon tax if the Coalition wins the federal election in September, 2013.
Opposition Climate Change Spokesperson Greg Hunt will deliver a speech at the Australian National University today where he outline plans to remove the tax.
Hunt said it will take about six months to implement the removal of the tax in Australia.
Under the Opposition's Direct Action policy, the Coalition will pay polluters in return for reducing emissions.
The reverse auction system would be like a carbon buyback and the cost would be capped at $1.55 billion over the first three years.
Hunt said funds will only be allocated when emissions are reduced.
The policy would commence on July 1, 2014, following a whitepaper process that will be initiated 30 days after the election.
