Clive Palmer’s Senate team will back the repeal of the carbon tax only if key climate bodies are retained and a new emissions trading scheme with a zero-dollar starting price is put in place.
The dramatic turn in the climate debate came at a joint media appearance with Mr Palmer and former US vice-president Al Gore in Canberra.
Prime Minister Tony Abbott came to office in September 2013 promising to abolish Labor’s carbon tax and replace it with a $2.5 billion Direct Action plan.
However, from July 1, when the Senate numbers change, the government will need the support of six out of eight crossbench senators to pass the repeal and abolish climate-related bodies.
The Palmer United Party, which will have three senators plus the support of the Australian Motoring Enthusiast Party’s Ricky Muir, went to the election promising to abolish the carbon tax.
Mr Palmer, who will meet with Mr Abbott in Canberra on Thursday, said that remained his party’s position but it would come with conditions.
One amendment to the bills would legally require all electricity producers to pass on price savings to consumers.
Direct Action would be opposed and instead an emissions trading scheme would be legislated, taking effect when Australia’s global trading partners put in place similar schemes.
“So this measure cannot be defined as a financial measure. This scheme will have a carbon price zero rated,” Mr Palmer said.
“The government and the parliament of the day have the ability to set the financial parameters of the scheme based on the action of our leading trading partners such as China, the United States, the European Union, Japan and Korea.”
The PUP will oppose the abolition of the Clean Energy Finance Corporation and the Climate Change Authority and allow the renewable energy target to continue until at least 2016.
Mr Gore told reporters that while he would have preferred that Australia’s carbon pricing scheme remain in place, he understood compromise was needed.
“I am extremely hopeful Australia will continue to play a global leadership role in this most pressing issue,” he said of the Palmer scheme.
He said all of the measures outlined by Mr Palmer would be “highly effective in reducing emissions”.
Crossbench senators-elect David Leyonhjelm and Bob Day have signalled they will vote to abolish the carbon tax, but it is unlikely they would support an ETS.
The Democratic Labour Party’s John Madigan opposes the carbon tax, and independent Nick Xenophon wants greater government assurances that what replaces it will significantly reduce emissions.
Under the existing scheme, the carbon price is due to rise to $25.40 a tonne on July 1, moving to a flexible price from July 1, 2015.
Labor announced before the 2013 election it wanted to abolish the fixed carbon price and move to an ETS in 2014.
A spokeswoman for Mr Abbott said the prime minister welcomed the PUP’s support in scrapping the carbon tax.
“We’re committed to our budget measures and will continue to talk respectfully and constructively with all senators and members,” she said.