I think a lot of the political risk is overstated and the closer...

I think a lot of the political risk is overstated and the closer we get to July 1, the more investors will realise CCF and COZ are undervalued and some of the few plays set to directly benefit from the Carbon Reduction Scheme.

The carbon tax is be in effect soon. The next election is a year away. Even if Abbott wanted to repeal the tax he'll have to get it through the Green-Labor-Independent weighted Senate which will block it.

Furthermore, in this time we might see USA but more likely China move towards a price on carbon which will completely shift global sentiment and we would look stupid to go back on what has taken a decade to put together. Moreover I think countries will look to Aus as an example. As much as the radio shockjocks will have you believe, the carbon tax will not cause the sky to fall in. Don't forget all the tax cuts as suggested by the Henry tax review will be bundled into this scheme.

Another thing to consider is that the alternative, the Opposition's 'direct-action' scheme is still likely to benefit the CFI and therefore COZ and CCF - I'm yet to look fully into this but this is partly because details on the Opposition's scheme are pretty scant.

All in all, I think both stocks are well worth having in any portfolio right now