Before Australia's August elections, Prime Minister Julia Gillard had ruled out a carbon tax but Climate Change Minister Greg Combet said Wednesday that circumstances had changed.
"In the political reality in the formation of the government, the circumstances are a bit different than we anticipated," Combet told the Australian Broadcasting Corp.
"It does mean that alternative policy options will come onto the table. We will be looking at the various options for the development of a carbon price … and we'll thoroughly subject them to proper evaluation," he said.
Australia's about-face on a carbon tax follows comments last week by Marius Kloppers, chief executive officer of mining giant BHP Billiton urging the government to impose a tax on carbon.
The issue of carbon was pivotal in the political demise of former Prime Minister Kevin Rudd, who had shelved his emissions trading scheme in April and was ousted in June. In her acceptance speech as interim prime minister, Gillard said she would seek consensus toward a price on carbon.
Australia has passed the United States as the world's biggest per capita carbon emitter.
An Australian Chamber of Commerce and Industry survey of Australian business owners released Thursday shows that 75 percent oppose a carbon tax or an emissions trading scheme.
Greg Evans, director of Economics and Industry Policy for ACCI, told China's Xinhua news agency that emissions reduction should be tackled instead through energy efficiency and greater use of energy technology.
"We think there's more sensible ways of doing that and that's through using technology and energy efficiency rather than imposing an uncertain carbon tax or the uncertainty of the emissions trading scheme," Evans said.
But Oxford University economist and leading climate change advocate Cameron Hepburn urged mining executives to support a carbon tax.
Speaking to a New South Wales (Australia) Mineral Council conference Monday, Hepburn said Australia should move ahead quickly in imposing a price on carbon if it wants to remain competitive in the global fight against carbon emissions.
Delaying action on carbon policies could cost Australia more in the long run, Hepburn said, warning that "if we don't price carbon soon we will be forced to do it at some point, in a way we don't like very much," the International Business Times reports.