Prime minister Julia Gillard demonstrated this week that she is not unwilling to engage in high risk politics.

Having been so craven in the policy debate in the 2010 election that she nearly lost, and then comparing unfavourably with the can-do persona of Queensland premier Anna Bligh in that state’s flood crisis, Ms Gillard has decided to run hard on the climate change issue. Consequently, the Labor government has committed itself to a carbon tax.

The context in which the new carbon tax policy was announced indicates an aggressive approach to the debate by the government that had hitherto been missing. Days before Gillard asserted her willingness to pursue the tax, Labor blind-sided the national debate with a spirited defence of multiculturalism – the first such explicit re-commitment to the idea since the days of Bob Hawke’s prime ministership and certainly the first major attempt to take the lead on this matter since the election of John Howard in 1996.

The tactic worked a treat, with moderates and conservatives in the Liberal party room suddenly turning on each other over whether or not the opposition should formulate policies based on differentiation on religion. After years of Labor being internally divided on ‘race’ matters, it was suddenly the Liberal party that was being ‘wedged’.

The Gillard government appears to have been emboldened by this approach, and, in a similar spirit of seeking to take the initiative in a previously problematic policy debate, declared 2012 to be the year of a carbon tax. No other details have been provided yet, including just what the carbon price will be. Ms Gillard’s willingness to engage with the debate is apparent though, particularly in the light of her willingness to have the carbon price proposal described as a ‘tax’.

Of course, it may well be that the Gillard government is attempting to make the best of a difficult political situation on the matter of climate change policy. At the moment, the conservative forces in Australian politics have a big say in the policy debate by virtue of their dominance of the Senate. On 1 July this year, however, those elected to the Senate in 2010 will take their seats, and it will be the Greens who will hold the balance of power in the new upper house.

The Greens influence extends to the lower house, too, where its single MHR, Adam Bandt, is one of the cross-benchers who support Julia Gillard’s minority government. The political reality for Gillard is that the Greens expect action from her administration on climate change. The Greens were committed to a carbon tax in the 2010 election, even if Ms Gillard was not.

The Gillard government’s post-election policy looks very much like the Greens perspective. No wonder senators Bob Brown and Christine Milne were part of the beaming entourage accompanying Ms Gillard as she declared her intention to legislate for a carbon tax.

The risks associated with this policy are obvious. The imposition of a carbon tax will impact on energy prices. These are already going up quite dramatically due to other factors, and the Gillard government might hope that state governments – most of which will be Liberal by 2012 – rather than Canberra takes the blame for electricity and gas price increases. Should the impost be excessive, however, the federal government may also feel the wrath of the voters. There is also a danger that Labor might wedge itself on this matter.

The Greens are able to take a hard line on carbon taxes because the party is a minor party, and because its well educated and very affluent core electoral constituency can afford tax increases. Labor shares some of this constituency, but it also has a blue-collar constituency some of whom have their economic interests tied in with energy and mining industries (on which the carbon pricing burden is meant to fall) as well as a much less affluent constituency who will be quite alarmed at the prospect of a tax-instigated increase in the cost of living.

The Gillard government has tried to placate the blue collar constituency by employing the rhetoric of economic restructure in justifying the new tax. Such an approach differs from that of Gillard’s predecessor Kevin Rudd, who tried to justify action on climate change on moral grounds. By casting the idea as a necessary economic reform, Gillard is returning to the approach John Howard took to sell the Goods and Services Tax back at the 1998 election.

That was the election, by the way, in which Howard lost 13 lower house seats, won only 48.9 percent of the national two party vote, and nearly lost government. He probably would have lost the 2001 election on the GST had the September 11 incident in New York not occurred and altered the international political debate. Herein lies the risk for Gillard, and it is an electoral risk.

Her government has already lost its majority and depends on cross-bench support to survive. Gillard’s popularity is already low, and the polls have been showing Labor and the Coalition to be equal on two-party support. Gillard can’t afford to lose one seat over this proposal to increase everyone’s cost of living, let alone the 13 Howard sacrificed for his big idea back in 1998. Gillard’s tax kicks in 2012, and an election is due by 2013. Gillard’s assertiveness over policy this year could well be the catalyst for the end of her government in 2013.

Dr Nick Economou is a senior lecturer in politics at Monash University.