It's on: Is this really the end of the carbon tax?

ALP leader Bill Shorten.

ALP leader Bill Shorten has announced the party’s climate change policy.

The party will support Prime Minister Tony Abbott’s plan to scrap the Carbon Tax. However, the party’s support is conditional on PM Abbott agreeing to introduce an emissions trading scheme.

If you’re a little bit confused as to what the difference is between the two, Amy Stockwell wrote an excellent explanation for us during the election campaign that you can read here. In brief, the difference is as follows:

A carbon tax is the price set by government that polluting companies will have to pay to release a certain amount of carbon dioxide gas into the atmosphere.

Under an ETS, companies buy and sell permits to pollute. The only role for a government regulator is to set a cap on how much pollution can be emitted by all companies in total and then to initially divide up that cap between companies in the form of emissions permits.

These permits give a business the right to pollute at a certain level. If a company doesn’t have enough permits to cover the amount of polluting that they want to do, they’ll need to buy permits from other companies who don’t need theirs (or reduce their emissions to the level of the permits they already have).

Mr Shorten is proposing an amendment that would let Mr Abbott abolish the carbon tax immediately but only on the basis that the Coalition moves to an emissions trading scheme.

Labor first attempted to introduce an emissions trading scheme (ETS) under the Rudd Government in 2010. However, the legislation was twice-rejected in parliament. It was during this period that (anti-ETS) Abbott came to the leadership of the opposition, taking over from (the pro-ETS) Malcolm Turnbull.

So, from a historical standpoint, is highly unlikely that PM Abbott will accept Labor’s offer.

If he rejects the offer, Mr Shorten has announced that Labor will oppose the Abbott Government’s repeal of the carbon legislation. If that happens, Prime Minister Tony Abbott would have to wait until the new Senate begins in July 2014 to abolish the carbon tax, as well as open his government up to a double dissolution.

Do you think that we should have an ETS?