Australian Prime Minister Julia Gillard earned herself international accolades last month when she announced the new carbon tax and future plans for integrating a carbon trading scheme in the country. At home, however, one of the people, who were not applauding her announcement, was Opposition Leader Tony Abbott.Much to the dismay of the ruling party, environmental activists and economic experts, Abbott made headlines this week with his “pledge in blood” to abolish the carbon tax if the coalition wins the election in 2013. He has also warned Australian companies not to invest in emission permits, as they will not be compensated for those unused once Australia’s carbon tax is deemed invalid.”We will repeal this legislation,” Abbott declared in his speech to the Menzies Research Centre taxation roundtable in Sydney. “We will dismantle the bureaucracies it has spawned. We would take the upward pressure off people’s cost of living and the threat to workers’ jobs. And we give businesses fair warning not to forward buy permits under a tax regime that will be closed down.”Under Gillard’s current tax plan, as of July 2012, the country’s top polluters would have to pay $23 in carbon tax for each emitted ton of CO2. The tax is expected to rise at a rate of 2.5 per cent annually until 2015, and to be replaced by a compliance carbon trading scheme thereafter. To prevent price volatility under the new plan post 2015, emission permits will have a $15 floor price and a ceiling price of $20 above the expected international rates.One of Abbott’s primary arguments against the carbon tax is that it could potentially force local businesses to close down. He claims that, if the government moves forward with the “toxic tax,” it will severely impair local manufacturing, outsourcing the domestic production processes to other countries like China, where, according to him, manufacturing is done “under much worse environmental conditions.”Another one of his arguments deals with carbon trading potentially turning into a “honeypot” for criminals, opening a big door for unlawful practices. “There’s a lot of scope for scamming if the carbon tax goes ahead,” Abbott claims.The backlash from Australia’s Opposition is very untimely. While the world is still suffering from economic distress and uncertainty, Abbott is adding fuel to the fire by sending mixed messages not only to Australian businesses, but also to the international community. His stand puts Australia’s commitment to a greener, more ethical and sustainable business environment in quite a shaky position.Domestically, experts warn that the uncertainty caused by Abbott’s announcement could cost the country billions of dollars. While in Europe to attend an International Energy Agency meeting, Australian Energy Minister Martin Ferguson said that “the costs of uncertainty can be measured not only in risks to energy security, but also in real cost impacts on consumers. Analysis commissioned by the government earlier this year shows that the cost of policy uncertainty in Australia could be as high as $5 billion.”Professor George Williams, a constitutional law expert, supports Ferguson’s view. In an interview for Radio National he explained: “Parliament has created carbon units. They are described as property, and no doubt there could be a High Court test case whereby people could argue that if the legislation is repealed they must be given full compensation in return.” And since under the legislation carbon units are defined as “personal property,” it will be more difficult for the Opposition to challenge the laws without compensation. “If you do find the legislation being repealed and major losses being suffered by companies and individuals who have taken ownership of these carbon units, then if they are not going to accept a major loss then you would imagine they will litigate,” he added.The carbon tax suspension is also expected to have broader economic repercussions. According to Greens deputy leader Christine Milne, Abbott’s warning to businesses to stay away from buying emission permits can result in higher electricity costs and lost jobs.And if the above arguments aren’t enough by way of evidence to convince Mr. Abbott to keep Australia’s carbon plan on track, new research findings should suffice. The University of Canberra’s NATSEM economic modelling unit estimates that, if kept as is, the weekly impact of the carbon price on households would be $8.50 per household. That is lower than the Treasury’s estimated $9.90 per household. At the same time, the NATSEM claims, the carbon tax would benefit households on average of $10.90 per week – an estimate higher than the weekly $10.10 predicted by the Treasury.