Howard made the announcement in a video message posted on the Prime Minister’s website.

Howard told a press conference in Melbourne this morning that the Federal Government yesterday would set up a single streamlined system for greenhouse and energy reporting by July 2008. This would force companies to report their emissions and set a long-term target to reduce their carbon output.

Companies emitting more than 125 kilotonnes of CO2 a year or using more than 500 terajoules of energy will be required to report at the start of the new system, as will individual facilities emitting more than 25MT of CO2 or using or producing 100 terajoules of energy.

The threshold will be phased down over time to 50KT of CO2 or 200TJ of energy used or produced. The facility threshold will remain the same.

Federal Environment Minister Malcolm Turnbull said around 700 companies would be required to provide detailed reports on their greenhouse gas emissions and energy use and production under the new system.

“This will improve the ability of governments and companies to monitor emissions and respond to the challenge of reducing emissions,” he said.

“The system will also, for the first time, provide easy accessible company level information to investors and the general public on greenhouse and energy use by Australia’s major companies.”

“An effective climate change strategy must build on these initiatives with credible targets to foster a multi-billion dollar Australian clean energy industry.”

In 2009, the government would introduce a second wave of legislation putting the new scheme into effect and establishing a new regulator to oversee the new carbon trading market.

Then in 2010, the government would set the short-term price cap for the scheme and issue permits to polluters before implementing full-scale trading.

Howard said he would also commit to further international discussions to link Australia's carbon trading market to others.

The government said it would increase spending by $A627 million on measures to tackle global warming.

Meanwhile, the Climate Institute has reportedly called on Howard to support renewable energy.

A spokesperson from the independent group was quoted by AAP as saying the scheme would not succeed unless there was more support for the renewable energy sector.

“Any credible and cost-effective plan to reduce emissions must support switching Australia to clean energy now,” the newswire quoted policy and research director Erwin Jackson as saying.