Australia's dirtiest coal-fired power stations are up to $1 billion better off because of the Federal Government's carbon tax package, according to new analysis by a private economic forecaster.

The figures may shed light on why talks aimed at closing down five of the country's highest polluting stations ultimately collapsed because of a disagreement over compensation.

According to Frontier Economics, brown coal power stations are between $400 million and $1 billion better off than they would have been if the government did not go ahead with the carbon tax package.

"If the objective of the carbon tax was to reduce greenhouse emissions and to discourage investment and high emission generation, you've got to believe it's been an abject failure," Frontier Economics managing director Danny Price told ABC Radio's AM program.

"It's a sick joke really on the environment."

The new analysis has been revealed just a day after the Government shelved plans to pay high-emitting power stations to close down.

Resources Minister Martin Ferguson said talks between the Government and power station operators failed to agree on how much the assets were worth.

The Frontier Economics report indicates that part of the reason for the "over-compensation" is because of the Government's decision to remove the carbon floor price and link Australia's scheme with the European Union carbon market, where the carbon price is significantly lower than domestic forecasts.

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If the carbon price followed the original Treasury forecasts, Frontier Economics estimates brown coal-fired power stations would have been up to $900 million worse off.

"What happened here was that the Government compensated the generators on the basis of the Treasury price forecasts of carbon, which were prepared some time ago, and since then the European price has really cratered, really fallen quite low, and it's expected to be low for some years to come," Mr Price said.

"The floor, as you can tell from earlier statements by the Government over the last couple of years, was a critical part of the scheme and the removal of the floor meant that the compensation was no longer in line with the rest of the scheme parameters."

But Climate Change Minister Greg Combet has dismissed the modelling, saying he does not pay much attention to the work of Frontier Economics.

"We did, through the Treasury, independent extensive modelling of the impact of the carbon price on the electricity generators... and we are very confident that our policy position is bang on track," Mr Combet told Sky News.

But the analysis will add further pressure on the Government to reconsider the level of compensation given to coal-fired power generators.

Yesterday, the Greens said they would push for the Productivity Commission to bring forward a review of the multi-billion dollar assistance package, arguing it was evidently too generous to drive significant change in the electricity market.

Mr Combet says the Greens are being "disingenuous", given they agreed to the compensation package as part of the multi-party climate change talks.