Professor Garnaut will release the draft of what he thinks the scheme should look like on Friday and is preparing to suggest that the first two years of the system - 2010 to 2012 - could be used to fine-tune the scheme allowing the Government some breathing space before higher petrol and electricity prices are passed on to consumers.

The big coal companies have not received a sympathetic ear from Professor Garnaut, who believes permits created by the trading scheme should all be sold.

Petrol should be part of the scheme, Professor Garnaut will recommend, so that its cost is spread as evenly as possible across the economy.

It is designed to limit the amount of greenhouse gases by setting a cap on the amount of greenhouse pollution Australia can release.

Companies producing greenhouse gases will need permits bought from the Government. This could raise more than $8 billion a year for federal coffers which the Government has promised to use to compensate households for increased energy costs.

But Professor Garnaut is also sympathetic to some money being spent on renewable energy and is likely to recommend some of the profits go to helping countries in the region, such as Indonesia and Papua New Guinea, develop their own climate change strategies, sources close to the Garnaut review team say.

The Prime Minister, Kevin Rudd, yesterday made a pitch to families to think of future generations when thinking about climate change.

"You can either look at your kids and grandkids and say, 'Not my problem, it's all your problem', or we in this generation can act," Mr Rudd said.

"And my view is, we've got a responsibility to act. But we are going to do it in an economically responsible fashion, and do it in a way which supports working families, working Australians, pensioners and carers on the way through."

The Leader of the Opposition, Brendan Nelson, accused the Government of trying to rush in the emissions trading scheme with potentially damaging results for the economy.

But Chris Richardson, the director of economic consultants Access Economics, warned the scheme would be pointless unless it gave consumers a price incentive to cut back on energy consumption.

"Prices, for example for petrol as well as a whole bunch of other things, have to go up in order to encourage us to be more careful with how much we use and in order to encourage business to come up with new ways of getting it to us in ways that don't pump out greenhouse gases," Mr Richardson said.

Professor Garnaut's desire for a two-year introductory period, dubbed by one observer as a "training wheels period", would allow business to adjust to the changes while still allowing Australia to meet its commitment to greenhouse production made under the Kyoto Protocol.

Professor Garnaut's report will not contain the overall cost to the economy of various forms of action on climate change because modelling commissioned from the Treasury is not yet complete.