Climate-change policy has ignited tensions within the federal government, with a group of backbench MPs led by Tony Abbott confronting Malcolm Turnbull over the proposed Clean Energy Target in a special party room meeting.
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As one MP in the room put it afterwards: "Malcolm could lose his leadership over this if he doesn't listen to us."
The disquiet means that Environment and Energy Minister Josh Frydenberg is likely to have little choice but to significantly modify the CET, as proposed in chief scientist Alan Finkel's review, to keep the backbench on-side as he finalises the Coalition's policy response, which is expected as soon as the end of July.
If he does, Mr Frydenberg runs the risk of putting Labor offside - particularly if the policy is too coal-friendly - and dashing the chance of the major parties striking compromise and ending the climate policy wars.
According to several MPs in the room, at least 21 backbench MPs raised concerns about the CET, while five spoke in favour of it and five were said to be non-committal.
Another senior MP in the room said while 32 people had spoken, one third of the speakers had been in favour of the Finkel review's recommendations, one third opposed them outright and one third expressed concerns but were non-committal.
The special meeting to discuss the Finkel review of the electricity sector, which proposed the contentious clean energy target (CET), got underway just after 4.15pm on Tuesday and wrapped up three hours later.
Special party room meetings are rare. The last one was held under Mr Abbott and focused on a similarly fractious issue - the Coalition's policy on same-sex marriage.
The length of the meeting and depth of feeling is likely to cause a re-think by the Turnbull government as it looks to implement a CET, with coal and gas likely to be given more favourable treatment.
One of the chief concerns of Coalition MPs was the declining role of coal in Australia's energy mix under a CET, while several MPs also warned that the CET - if implemented - could make things worse by further driving up energy prices.
The Finkel review found that doing nothing would drive prices up more than a CET or an emissions intensity scheme.
There were also calls in the meeting for stronger intervention in the gas market to put downward pressure on prices, despite the steps already taken by the Turnbull government.
The debate over climate change is a proxy, in some sections of the Coalition, for concerns about Mr Turnbull's leadership just as it was back in 2009 when he was replaced by Mr Abbott.
At various times in the meeting, Coalition MPs questioned the 42 per cent renewable energy target projected by Finkel, Australia's commitment to the Paris climate targets and the estimated $90 a year reduction in power bills under a CET versus business as usual.
Mr Abbott told the meeting that Australia had a huge natural energy advantage and that it should make the most of it.
The Prime Minister, who has the backing of senior conservative ministers such as Barnaby Joyce and Mathias Cormann, carefully left the door open to coal remaining in the nation's energy mix during question time.
"A clean energy target does not penalise coal, it does not prohibit the construction of a coal-fired power station or indeed a gas-fired power station," Mr Turnbull said.
Mr Joyce, who helped lead the campaign against Labor's carbon tax, said business-as-usual wasn't working and Australia needed to abide by its international obligations, which are to reduce emissions by 26-28 per cent against 2005 levels by 2030.
Mr Joyce later criticised Opposition Leader Bill Shorten, predicting the Labor leader would say no to whatever compromise policy position the government proposed.
"We are all moving to make sure we try and land this, even the National party. We are doing our bit, the Labor party should do their bit," he said.
Labor has questioned how a CET could include coal any type of coal fired power.
Senator Cormann said "the biggest cost . . . we could impose on consumers and taxpayers will be to do nothing".
The CET would provide incentives for generators to produce electricity below a certain emissions intensity baseline. The Finkel review modelled a scenario in which low emissions would be defined as below 0.6 tonnes of pollution per megawatt hour.
Generators would receive certificates for the proportion of electricity produced below that emissions level, which could then be traded.
Labor has indicated it will likely not support a government-proposed CET that sets the baseline too high, such as at or above 0.7 tonnes per megawatt hour, which would mean some forms of coal could earn partial certificates.
