According to the emissions trading report handed to Prime Minister John Howard late last week, Australia should set up a flexible carbon trading scheme that could be intergrated into any future international scheme, but any premature introduction of a carbon cap and a trade scheme would undermine the stability of the system.

However, an AMP Capital research analyst has urged companies to immediately start factoring a range of emissions scenarios and prices into their decision making.

AMP Capital senior research analyst Ian Woods told an Environment Business Australia forum last week that once the rules for the scheme are determined the implications will be factored into the price of the traded equity immediately. The fact the scheme will not start for several years will be irrelevant.

He has also developed modelling for a host of individual businesses on the impact of a carbon pricing system on their earnings before interest, tax, depreciation and amortisation (EBITDA).

"Once the rules are decided I can tell exactly what the impact will be on various companies," he said.

"Some companies obviously are already looking at this issue, and they tend to be the ones who will be the most disadvantaged. The good ones are already factoring that into their decision making, irrespective of what the rules are."

The task group that compiled the report was handpicked by Prime Minister John Howard and led by head of the Department of Prime Minister and Cabinet, Peter Shergold. So it is no surprise that it backed Howard's doubts about the Kyoto Protocol, which it said had "fundamental shortcomings".

However, Labor says Australia must immediately ratify the protocol, "to show we are serious and want to help forge a global solution" and has also held strong to its target of 60% emission cuts by 2050 in line with the Stern Report. It wants to launch a trading scheme in 2010.

The government dubbed the Labor policy as "economically irresponsible".

But Queensland Premier Peter Beattie has launched a far more detailed policy with ambitious medium-term targets – including a 34% cut from the state's 2000 level of greenhouse gas emissions – that has been cautiously welcomed by the Queensland Resources Council.

In addition, Federal Labor's goal of beginning carbon trading from 2010 has received strong support from ratings and research company RepuTex, which said it would be in Australia's long-term interest for a national carbon-trading scheme to begin by that date.

RepuTex head of carbon research Jerome Suere said more than half of the businesses that made a submission to the Shergold task group called for a national carbon-trading scheme to be introduced as soon as possible.

"The business community wants it," he said. "Climate change will be the next global driver for economic growth. Australia is no exception in the global challenge of climate change and the need to move to a low carbon economy."