Garnaut Draft Report

If Australia chose a "middle-of-the-road" policy, the effects of climate would still cost about 4.8 per cent of gross domestic product, or around $400 billion, by end of the century, Mr Garnaut said in launching his report.

"An effective market-based system will be as broadly based as possible, with any exclusions driven by practical necessity and not by short-term political considerations," the report said.

Today marks the start of a critical phase in our response to climate change and it’s important we remain focussed on the main game, there are three key tests.

1. Reversing Australia’s still-rising greenhouse pollution by 2012 - data released last week showed continuing increases with the biggest spikes from electricity generation, up 53 per cent between 1990-2006, and transport, up 27.4 per cent during the same period. We should, and can, reverse this trend by 2012 with reductions of at least 25 per cent on 1990 levels by 2020.

2. Leadership to achieve an effective global agreement - Australia can only help to achieve the global climate agreement so vital to our long term national interest if we are committing to reduce our emissions, but also signal that we will invest in clean technology in developing countries and help them prepare for unavoidable climate impacts. A guaranteed proportion of the emissions trading revenues should be set aside for such assistance.

3. Making Australia competitive in the global low carbon economy - Meeting emission reduction targets and building the clean-energy alternatives will generate trillions of dollars of investment opportunities. Australia needs policies to ensure all new electricity load generation comes from clean energy and that support, not hinder, investment in clean energy and low carbon technologies.

He said putting an ETS on "training wheels" would help the scheme inter-connect with international carbon markets but warned that taking strong action should not be delayed.

"Australia would be hurt more than other developed countries by unmitigated climate change, and we therefore have an interest in encouraging the strongest feasible global effort," he said.

ACT Opposition spokeswoman Vicki Dunne says government must get the public on board as it develops policy from the findings.

"I think that what I'd like to see from the report is perhaps something a little more consumable for the average person than the 500 odd page report that there is now," she said.

"I think there needs to be a lot more engagement of average voters, average citizens on the subject."