Professor Garnaut's 600-page draft report, Garnaut Climate Change Review, was released in Canberra today and said climate change was a "diabolical policy problem".

"It is harder than any other issue of high importance that has come before our polity in living memory," he said.

"While an effective response to the challenge would play out over many decades, it must take shape and be put in place over the next few years."

Professor Garnaut's report said the impacts of climate change on Australians and the Australian economy would be insidious rather than directly confrontational.

He said delaying action now was not delaying a decision, but making one that chose to do nothing.

"The solution to this challenge must be found in removing the links between economic growth and greenhouse emissions," Prof Garnaut said during the launch.

The draft report looks at specific modelling on the cost of climate change without action, and looks at a framework for an emissions trading scheme in Australia which would see agriculture intially excluded, while petrol is included.

But he warns the cost of being part of the scheme "by ourselves" without other international trading partners and developed countries in particular doing the same would erode confidence in Australia's market system.

He said there would be a mechanism in the scheme he proposes to review the system in Australia if other countries are not on board.

"What Australia does, does matter," he said.

"If we're out on our own by 2020 there are mechanisms for review."

He said the Kyoto targets were the "centerpiece" to the emissions trading scheme which would have broad coverage.

Professor Garnaut has recommended the need for a much bigger effort in research and development into low emissions technology.

There is a significant amount of modelling in the review on the affects of climate change over time on the Murray Darling Basin system, which Professor Garnaut said "would be mourned" if it was to disappear as a result.

He said under a "business as usual" scenario, run offs into the Murray Darling Basin would be gone over time.