The prediction is part of the latest publication from the firm’s climate change team, which includes experts Elisa de Wit, Noni Shannon and Damon Jones.
The publication, titled 'The future of the Carbon Pricing Mechanism, Managing uncertainty', aims to help firms respond proactively to a potential repeal or change to the carbon price by examining possible scenarios.
Overall, the paper examines several scenarios for the repeal of the carbon price.
Norton Rose writes: "The coalition has committed to repeal the CPM if it wins the election, but the avenues and timelines for achieving this will depend on the make-up of both houses of parliament after the election."
The first scenario is that the coalition wins a majority in the senate and the House of Representatives. However, this scenario is extremely unlikely, because only half the Australian senate is elected at a time.
Alternatively, the coalition may also secure the support of a minority party in the new senate or even the Labor Party. But Labor has said it would not support a repeal or change.
Assuming senate support, a transition period would be required for businesses to unwind contracts and existing legal arrangements, meaning further delays.
Noting this, the publication cautions: "It is unlikely that a repeal of the CPM would take affect before the second half of 2014 (which falls during the third compliance year of the CPM)."
If the coalition fails to win support for a repeal in the new senate, another possibility is that a double dissolution is called. The coalition has stated it will pursue this.
However, it is also uncertain as to whether a coalition government could win a double dissolution, as only one of the last six double dissolutions have resulted in the government winning the senate and passing the legislation in issue.
On this topic, Norton Rose writes: "The fastest possible time frame for repeal via the double dissolution avenue is likely to be approximately 8-9 months from the election, but it could potentially extend several months longer than this. This would mean that a repeal would be unlikely to take place until some time during the 2014-15 CPM compliance year."
Finally, Norton Rose considered whether the coalition could amend or partially unwind the CPM “so that it no longer operates as it was originally designed to”.
There are a number of possible outcomes here, including setting the carbon price to zero, oversupplying carbon allowances or setting the CPM liability threshold so that no entities are liable.
On this issue, Norton Rose writes: "it would appear that Labor, with the support of the Greens and the Independents, has done a good job of producing an 'Abbott-proof fence' and the Clean Energy Act has been well designed to protect the CPM against any significant amendment."
The complete, detailed analysis is available here, while the Deutsche Bank’s Special Report entitled If the Coalition wins, how long would it take to repeal the carbon price? from May 2012 is also a valuable read.
