ABOUT $9 billion worth of government subsidies are flowing to the mining, gas and petroleum industries each year, directly contradicting government efforts to cut greenhouse emissions, a new report says.

The Australia Institute analysed tax breaks for fossil fuel use in recent budgets, including excise exemptions for the liquefied natural gas industry and fuel credits for aircraft and company cars. Its report says there is little point in putting a price on carbon emissions without first cutting incentives for using them.

''Proposing to introduce a carbon price while retaining existing fossil fuel subsidies is analogous to driving a car with the accelerator and the brake both pressed to the floor,'' said the report's authors, Richard Denniss and Andrew McIntosh, an economist at the Australian National University.

The Greens, who will hold the balance of power in the Senate when the government's carbon trading legislation is debated, have endorsed the findings and suggested some of the rebates and subsidies could be wound back as part of a climate change deal.

''At the moment energy policy and climate change policy are on a collision course, and as a result the government is massively subsidising these activities that are cutting across their climate change efforts,'' said the Greens senator Christine Milne.