The federal government of Australia has decided to scrap its carbon floor price and will link is carbon scheme with the European carbon market from July 1, 2015.

The government said that it has decided to scrap the $15 floor price on Tuesday under the carbon trading scheme that is expected to be implemented in 2015. Many believe that the revenues from the trading could be reduced as the international prices fall.

Climate Change Minister Greg Combet has affirmed that the budget revenues will not be reduced is backing the Treasury, which predicts a an international carbon price of $29 a tonne in 2015-16 compared to $10 a tonne at present.

However, Opposition climate change spokesman Greg Hunt said that the latest decision by the government shows chaos and confusion' within the government. He pointed out that the government stated that the carbon price will not change as a result of the decision, while on the other hand, there is a prediction the prices would increase to $50 by 2015/16.

Mr Hunt again stressed that the carbon tax must be scrapped by the government.