ETS could cost a million jobs: business

Emissions trading could jeopardise up to a million Australian jobs, big business warns.

The powerful Australian Industry (Ai) Group has released a submission on the government's design for emissions trading, due to start in 2010.

The group wants the scheme delayed by a year, more favourable treatment for businesses and nuclear power on the table as part of the solution to climate change.

It also wants petrol to face the full brunt of emissions trading, which would push up the price.

And it wants Australia to aim to cut its greenhouse emissions by between zero and 10 per cent by 2020.

This compares with the 25 per cent cut recommended by federal government adviser Ross Garnaut, in the context of a strong global climate pact.

Ai Group chief executive Heather Ridout called for changes to the government's draft plan for emissions trading.

"Our members are gravely concerned that Australia will move too fast and too far ahead of the rest of the world.

"The government's preferred positions would leave many of these (trade-exposed) industries in an uncompetitive position."

Ms Ridout warned if the government got the scheme wrong, businesses would press for exemptions and border tariffs against countries which do not have emissions trading. Such tariffs would likely create difficulties in trade diplomacy talks.

The submission says businesses accounting for well over 10 per cent of national production and one million jobs are at risk of "carbon leakage" under emissions trading.

This refers to the risk of business shifting overseas to countries which do not have emissions trading.

Specifically, the submission calls for more free permits for business - 25 per cent of the total, instead of 20 per cent.

There should be a low price ceiling on permits until at least 2015, the submissions says.

The national target of 20 per cent of energy coming from renewable sources by 2020 should be dropped.

And the Ai Group wants nuclear power investigated.

"Nuclear energy, for example, must not be ruled out of consideration and should be retained as an option," the submission said.

The federal government has ruled out domestic nuclear power but the opposition is more receptive to the idea.

The Ai Group also wants a rethink of the way emissions-intensive, trade-exposed companies would be compensated under emissions trading.

The group has suggested companies be assessed by value, not revenue, and the proposal of having two "sudden death" thresholds to be reconsidered.