The Government has seized on the Opposition Leader Tony Abbott's remarks that an emissions trading scheme is a market of an "invisible substance".

The Government has confirmed it wants to move from a fixed carbon price of $24.15 a tonne to a floating price of about $6 by July 2014, a year earlier than planned.

It is a political fix designed to neutralise the poisonous carbon tax issue, but it has created a new budget problem and sparked a war of words.

Today Mr Abbott was asked to explain why he objects to the Government's scheme, when the Coalition has previously backed the idea of a market-led solution to greenhouse gas emissions.

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"This is not a true market. Just ask yourself what an emissions trading scheme is all about," he told reporters.

"It's a so-called market in the non-delivery of an invisible substance to no-one.

"Ever since Copenhagen, it's been absolutely obvious that the world is not moving towards taxes - whether they're fixed taxes or floating taxes.

"The world is moving towards the kind of direct action measures to improve the environment which the Coalition has long championed."

The Coalition has previously backed the idea of a market-led solution to greenhouse gas emissions.

Finance Minister Penny Wong has mocked Mr Abbott's comments, saying they show he is not fit to lead the country.

"Just pause for a minute and imagine Tony Abbott at an international meeting talking to Barak Obama and David Cameron, both of whom believe in action on climate change, and telling them that 'look this this is just about the non-delivery of an invisible substance to no-one'," she said.

"This is an absolute joke and confirms yet again that Tony Abbott is simply not up being the leader of the nation.

"A man who thinks that climate change is, in his words, absolute crap, is now mocking the very design that John Howard himself put forward to deal with climate change."

Coalition claims ETS will leave $6bn budget hole

A key challenge of Labor's carbon pricing overhaul is the cost to the budget bottom line.

The change means a drop in revenue, though the Government is not yet saying just how much.

Opposition environment spokesman Greg Hunt says the change will leave a $6 billion budget revenue shortfall.

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Mr Hunt argues the floating carbon price will rise in line with market movements, meaning any financial benefit from the switch from a fixed price will be lost.

"This is a classic Kevin Rudd con, because whether it's called a carbon tax or whether it's called an ETS, it's still a carbon tax and it's still intended to go up to $38 over the coming years," he said.

"Mr Rudd has finally conceded that it's destroying jobs and hurting families, but all he's doing is changing the name."

Senator Wong says the lower carbon price will mean lower household power bills, and a windfall for householders, because the Government's domestic compensation package will not be wound back.

But she is not saying the same for industry compensation and she will not say how the Government will claw back the lost revenue.

"We will make further announcements about savings associated with the floating price when we announce the floating price," she said.

"What I can say to you as Finance Minister, as with all other policy areas, we will approach this change in a fiscally responsible manner and we will find offsetting savings."

Households may be better off under ETS

Mr Abbott has frequently promised to scrap the carbon tax.

He says while the move to an ETS may bring some financial relief, greater benefit would stem from the abolition of carbon pricing.

"Whether it's a fixed tax or a floating tax, it's still a tax, it still hurts," he said.

"Abolishing the carbon tax will take $5,000 off the price of the average new home," he said, adding that cost benefits would stretch across the construction industry.

But Treasury modelling seen by the ABC's AM program shows families could be better off after the decision.

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A single-income couple with two young children earning around $75,000 a year would be $380 better off in 2014-15, while pensioners would save between $140 and $180 and a dual-income two-child family on about $100,000 a year would save more than $400.

"We're responding to two things, and we're responding to the change in the Australian economy, the rapid transition away from the mining boom and the need to stimulate non-mining investment," Mr Bowen said.

"We're responding to that and we're responding to people's concerns about costs of living."

Bringing in a floating carbon price a year early would require the Parliament to pass changes.

The Government's yet to say when that would happen and any change would not have the support of the Greens.

Some business groups have welcomed the decision, but the Minerals Council of Australia believes the architecture of the ETS must be examined.

The council says methane emissions from coal mining are excluded from the Europe emissions trading scheme and it is urging the Government to do the same.

The Australian Chamber of Commerce and Industry says the Government should abandon the carbon price altogether.

ACCI chief economist Greg Evans says moving to a market price one year early is simply a political gesture.

"It will still impose a multi-billion-dollar cost on Australian business that our competitors around the world don't have to pay, and will continue to impede Australia's competitiveness and productivity," he said.