BILLIONS of dollars could be sacrificed by the Federal Government as it re-shapes its carbon price into a market scheme that will slash the tax's revenue by up to 75%.
Treasurer Chris Bowen foreshadowed that Prime Minister Kevin Rudd would announce the evolution of the carbon tax - which sits at $24.17 per tonne at the moment - to an emissions trading scheme, likely to match its British equivalent at $6 a tonne.
Mr Bowen said it would cost "several billions" but would not give a specific figure.
The change means bringing forward the change to an ETS.
It was initially slated to link to other emissions trading schemes from July 1, 2015.
Mr Bowen said the changes were being made due to "big challenges and headwinds" facing Australia's economy, particularly as China's growth began to ease.
"We think this is important in terms of supporting the non-mining sector, in getting that investment up, letting manufacturing and services grow, as the mining boom comes to an end," he said.
"We also think it's important to provide some cost-of-living relief to families."
Australian Greens Leader Senator Christine Milne described the plan as a back flip and "cowardly" from Prime Minister Rudd who once described climate change as the greatest moral challenge of our time.
Opposition Leader Tony Abbott said it was difficult to discuss the change, because nothing had been announced.
Nevertheless, he said a change from a fixed price to a market-powered mechanism was "another Kevin con job".
"He has changed its name but he hasn't abolished the tax."
When those comments were put to the Treasurer, Mr Bowen said "families will see a big benefit" with a fall in the carbon price.
During his interview, Mr Bowen would not be drawn on when the Federal election would be held.