Political editor Malcolm Farr tells us what to expect now the carbon tax has been repealed.

JUST as the sky did not fall in when the carbon tax was introduced, nor will the sunshine break with its repeal.

Today is a triumph of short term politics over long term policy making.

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At the margins, certainty on the repeal of the carbon tax will give business confidence. But they’ll remain nervous about the Senate’s plans to derail the government’s budget fix.

Longer term, climate change remains a real threat to our economy, which is already prone to drought and floods.

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The overwhelming majority of scientists still believe increasing concentrations of greenhouse gases in our atmosphere will trap heat close to the earth, warming temperatures, heating oceans and changing weather patterns.

Those changes will negatively impact a range of industries, from agriculture to insurance.

Scrapping the legislation underpinning Australia’s carbon price, as the Senate has today, throws the baby out with the bathwater.

Economists agree a carbon price was the lowest-cost, most effective solution to the problem of climate change.

Australia’s substantial legal framework around emissions trading was almost a decade in the making, soaking up a lot of time and resources to design and put in place.

It should have been allowed to remain in place, albeit with a reduction in the carbon price from a fixed price of around $25 a tonne of carbon to the floating international price, which is more like $7.

Sure, after today, big polluters will pay less thanks to the tax’s repeal. Households — who forget they were already fully compensated for rises in electricity costs through tax cuts and welfare payments — will enjoy a double dividend if the government is successful in getting companies to refund them the cost of the tax too.

But Australia will be left without a market-based policy designed to re-engineer our economy towards a lower carbon path.

We will come to regret this day.