Business groups have applauded the Government's carbon emissions reduction scheme, while criticising the demands it will put on companies.
The Australian Industry Group praised the government's language for the Carbon Pollution Reduction Scheme, which will eventually be voted on in parliament, but described the goals as a "stretch'' because of the added costs to business.
The emission trading scheme will have a "big impact'' on the economy by adding up to $7 billion to business costs by 2010 after compensation, AIG said.
"Ai Group remains of the view that we should not be wedded to a particular start date and that putting a robust system in place in line with international developments is more important,'' chief executive Heather Ridout said in a statement.
"This is especially so in view of the lack of certainty about the international response and huge uncertainty about the prospects for the world economy in both the near and medium term.''
Lorraine Stephenson, climate change leader at Ernst and Young, said the added clarity was good for business in general.
In the white paper the government also expanded the type of companies that could receive assistance, a change that cleared up some of the ambiguity facing individual companies, she said. "A broader range of industries are now eligible.''
"For those that have been on the border line previously, that would be a great relief for them.''
For emission intensive industries such as mining and manufacturing, the government's move to more frequent monthly auctions would assist industries electricity generation and fuel supply sectors, she said.
However, the gas industry has complained about the introduction of the renewable energy target, designed to promote the use of sustainable energy in the place of fossil fuels.
"Generating power from natural gas produces half the emissions of coal-fired power, and given Australia's reserves of natural gas, it is sensible to encourage power generators to move to gas - particularly in the medium term,'' said Australian Pipeline Industry Association chief executive Cheryl Cartwright in a statement.
The trade group said the renewable energy target would negate the benefits of increasing natural gas use to better diversify the nation's mix of energy consumption.
"The renewable energy target - if it is not expanded to include 'lower emissions' technologies - combined with the CPRS will discourage the use of natural gas and the Government should postpone the RET indefinitely,'' Ms Cartwright said.
Today's report has disappointed and enraged environmentalists but companies outside of the emissions intensive industry reacted warmly to the government's emissions trading scheme.
"The Government should be commended for striking the right balance between Australia's commitment to play its part in international efforts to reduce greenhouse gas emissions, ensuring the CPRS does not have an overly negative impact on the economy, and providing adequate compensation for industries directly affected by emissions trading and households,'' said Nicholas Scofield, general manager corporate affairs, Allianz Australia.
czappone@fairfax.com.au
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