Australia's carbon price is forecast by treasury and finance boffins to be slightly higher than expected, driven by stronger prices in Europe.
But the updated outlook by the departments on Tuesday comes with a warning, that Australia's carbon price still remains at risk of "considerable uncertainty" from Europe.
The departments' latest Pre-election Economic and Fiscal Outlook (PEFO) predicts a marginally higher Australia carbon price will contribute to tax receipts being revised up by $155 million in 2014/15.
Since the release of Labor's economic statement less than a fortnight ago, a higher European carbon price and lower exchange rate had impacted on receipts from the pollution pricing scheme, PEFO stated.
Carbon prices earlier forecast at $6 per tonne in 2014/15, $12.10 in 2015/16 and $18.60 in 2016/17 are now estimated to be $6.20, $12.50 and $18.90 respectively.
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The long-term $38 per tonne forecast still stands.
However PEFO stresses the "sensitivity" of the estimates to fluctuations in Australian carbon price.
"A simple rule of thumb for a $1 change in the carbon price in any given year would be a change in the underlying cash balance of around $160 million in 2014/15," PEFO stated.
Australia's price would be "significantly affected" by changes in Europe's economic outlook, and efforts there to reform their ETS.
One such reform now looking likely to pass is "backloading": a plan to temporarily remove 900 million permits from the EU carbon market to drive up its flagging price.
Specialist carbon and energy firm RepuTex says if successful, backloading could lead to a doubling of Europe's carbon price.
"Certainly the signs in Europe are that backloading will ultimately be supported, and that is leading to positive sentiment in the market," RepuTex's Hugh Grossman told AAP on Friday.
The price spike might not flow through entirely to the local market, with Australia's price to be affected more by the number of carbon permits allocated through the ETS when it starts in July 2015.
Shadow treasurer Joe Hockey said the PEFO showed the carbon tax clearly hadn't been "terminated", as promised by Prime Minister Kevin Rudd last month.
