"I do not believe that Australia needs to lead the world on climate change, but I also don't believe that we can afford to be left behind. That is why the time is right and the time is now," she said. Coalition leader Tony Abbott, meanwhile, has attacked the carbon tax plan as an ''utter betrayal'' of the Australian electorate, which will raise household costs. Transition is key Nathan Fabian, chief executive of the Investor Group on Climate Change, welcomed the starting date in July 2012. "The key issue is the transition from fixed to flexible pricing to give certainty to investors for the long term," he said. "We think the transition should be three years as we need a target as soon as possible so the economy knows how much it has to adjust."

A climate change committee - which involves the government, Greens and independents Tony Windsor and Rob Oakeshott - has held four meetings since it was set up in September last year, in the aftermath of the election. The government abandoned its previous emissions trading scheme last year after it failed to get it through the Senate. The Greens sided with the Coalition to vote against an emissions trading scheme, arguing the carbon reduction targets were too low and industry compensation was too high. The abandonment of the ETS breached a promise by former prime minister Kevin Rudd to tackle climate change and was blamed for his drop in opinion polls and eventual toppling by Ms Gillard. The opposition has said it would block any new "carbon tax", so the government will rely on the votes of the independents and Greens to secure the passage of its legislation.

Time's ripe Ms Gillard said it was time to put a price on carbon emissions. "I'm determined to price carbon," she told reporters. "History teaches us that the countries and the economies who prosper at times of historic change are those who get in and shape and manage the changes. "The time is right and the time is now."

Ms Gillard said a fixed carbon price would start on July 1, 2012, before moving to a cap-and-trade emissions trading scheme within three to five years. Putting a price on carbon was the most efficient way to cut carbon pollution, she said. "If you put a price on something, people will use less of it." Review plan One year before the end of the fixed price period, a review would consider if there were any reasons to delay moving to a cap-and-trade scheme.

"The hard-wired mechanism here is to move to cap and trade," Ms Gillard said. "But there would be a review one year in advance to assess whether there were any real reasons not to take that step." Agricultural emissions will not be included in the carbon pricing system. "The measures and mechanisms for counting agricultural emissions are simply too complex," Ms Gillard said. "But we do want to work with farmers with our agricultural community to make sure that they get the benefits of changing practices and changing carbon."

Ms Gillard said the carbon price set by the government would be fair. "Every cent raised from pricing carbon will go to assisting households, helping businesses manage the transition and funding climate change programs," she said. "And the government will always support those who are in need of assistance with cost of living pressures."



Carbon pollution threatened Australia's future prosperity, Ms Gillard said.



"We need to ensure that Australia has a low-pollution economy for the future - we can't afford to be left behind."



Abbott view Ms Gillard said she would not back down during what she predicted would be a tough fight ahead with Opposition Leader Tony Abbott.



He would immediately be spruiking a fear campaign "and talking to Australians about a great big new tax on everything".



"[But] can I make it very clear that in the debate that will ensue I am not intending to take a backwards step.



"We are a confident nation and we are good at change. We've proved it in the past."



Ms Gillard said more work needed to be done on the details of industry assistance and household compensation.



The government's failed carbon pollution reduction scheme had already achieved some good work in that area, she added. "It's not my intention to just put that work to one side," Ms Gillard said.

"But there are discussions to come and there will be some difficult conversations to come."



Matters of compensation would be worked through with the multi-party climate change committee. Household impact Loading Greens leader Bob Brown said his party would be lobbying to get a good deal for householders.



"It isn't just a matter of compensating industry - particularly polluters," he said.



"What we want to do is compensate those people who are suffering the outcome of long-term carbon pollution of the atmosphere."



Greens climate change spokeswoman Christine Milne said there could only be a price on carbon because the Greens held the balance of power in the Federal Parliament.



"It's exciting [and] it's happening because we have shared power in Australia," she said, adding that majority government would not have delivered the outcome.



"It is because the Greens are in the balance of power working with the other parties to deliver not only the aspiration but the process to achieve it."



However, Senator Milne sounded a note of caution, declaring a carbon price would only become a reality if all parties could reach agreement on the details.



Climate Change Minister Greg Combet left the door open for fuel to be included in the scheme.



The proposal from the multi-party climate change committee includes a list of sectors which could be included - one of which is the transport industry.



Mr Combet said the committee would consider phasing in the ETS for different sections of the economy.



"That [including fuel] is not a settled issue at this point in time, but it is an issue the committee will consider," he said. AAP, Reuters

