On the long term view, 2015 is in the distance, but it’s just around the corner for harassed Labor ministers and their officials.
Speculation puts the hole in the budget at perhaps a total of $10 billion for the two years, starting from mid 2015.
But what will appear in the budget will depend on the official estimate of the price in those years and the EU situation injects more uncertainty.
The climate change optimists hope for a recovery; those pessimistic about the European economy will predict the opposite.
Whatever estimate Treasury puts in its figures will be open to debate in the budget where the Coalition will be hotly contesting any numbers that it can.
If the government was hoping to show some pathway back to surplus in the budget numbers this has been made harder.
In trying to juggle its big spending programs, the government is loading a lot into the latter years of the forward estimates – a new assault on revenue then makes this more dicey.
If the floating carbon price in 2015 was anywhere near the current EU level, there would be significant unintended results for the compensation side of the package that the government put in place last year.
Low and middle income earners and welfare recipients would get a windfall, because the compensation has been set on the assumption of a much higher price.
It is perhaps not surprising that the EU, faced with Europe’s immense problems, has opted for short term economics over longer term environmental issues.
In Australia, despite a much more benign economic situation, even mildly harder times have worked against support for tackling climate change.
What was such a strong issue for Kevin Rudd in 2007 will help Tony Abbott in 2013, regardless of the criticisms of his “direct action” alternative.
Last year’s Lowy poll found that for the first time Australians favouring an intermediate approach to the problem of global warming outnumbered those supporting the most aggressive form of action.
One third (36%) backed taking steps now “even if this involves significant costs” – compared with two thirds (68%) in 2006.
Last year 45 per cent backed the option which said that “the problem of global warming should be addressed, but its effects will be gradual, so we can deal with the problem gradually by taking steps that are low in cost”.
The EU decision may help Abbott in another way, if he is elected. Opposition climate action spokesman Greg Hunt said yesterday a Coalition government would expect and urge the ALP “to accept the clear mandate of a new government” and not block the legislation to repeal the scheme.
A very low European price could make it more difficult for a Labor opposition to stand against repeal of a scheme that looked out of sync.
On the other hand, the complex task of unwinding the carbon model could turn into a nightmare for a first term Liberal government.
Michelle Grattan AO is one of Australia’s most respected and awarded political journalists. This article first appeared on 
The Conversation.
Michelle currently holds an academic position at the University of Canberra and is associate editor (politics) and chief political correspondent at The Conversation. She was the former editor of The Canberra Times, was political editor of The Age and has been with the Australian Financial Review and The Sydney Morning Herald.
