The federal government's key adviser on climate change has flagged there will be a greater cost to the economy and Australian businesses under any future emissions regime, including a possible higher starting price, as a result of years of inaction on tackling the issue.
Ahead of the release of the first update paper to his 2008 report to state and federal governments, Ross Garnaut also warned Australia was falling behind both the United States and China in dealing with climate change.
Tight budgetary conditions would limit any assistance provided to industry under any carbon price scheme, he said.
Prime Minister Julia Gillard has pinned her government's environmental credentials to achieving a price on carbon this year, saying last week it was the most "economically efficient" way to reduce emissions.
But Professor Garnaut, speaking exclusively to The Australian Financial Review, said the decision to shelve an emissions trading scheme (ETS) last term would have implications for his conclusions in his final report.
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