Climate action groups welcome new tax

Climate action groups have hailed the passage of the federal government's carbon emissions tax, while business groups warn it will be a burden on industry and consumers.

The controversial tax cleared its final parliamentary hurdle when it went to a favourable vote in the Senate on Tuesday, after months of public debate and fierce opposition from the coalition.

The Victoria and NSW state coalition governments were scathing, saying the tax will cost jobs and push up power prices.

NSW Premier Barry O'Farrell said the last thing his state needs is "another Labor tax to put the handbrake on business".

Victorian Energy Minister Michael O'Brien says the tax will hit the state budget hard.

South Australian Labor Premier Jay Weatherill supported the tax and the state would detail its impact on the state budget at the mid-year budget review.

Greenpeace said the passing of the climate bills and related legislation in the upper house was "a first step" towards protecting the community from polluting industries.

"At last we can begin the long game of catch up towards more progressive international players on reducing our carbon emissions," spokesman Dae Levin said in a statement.

The Australian Conservation Foundation said the legislation would encourage the nation's biggest polluters to change their ways.

"Industries that do want to contribute to creating a cleaner and healthier future for our children and grandchildren now have a financial incentive to find new, cleaner ways to do business," foundation chief executive Don Henry said in a statement.

The Australian Solar Energy Society said the vote was a major step forward for the renewable energy industry.

"We are finally penalising pollution and rewarding clean energy," chief executive John Grimes said in a statement.

"This will deliver substantial investment in solar power and position Australia as a solar nation."

But NSW Business Chamber chief executive Stephen Cartwright said the federal government had placed Australian businesses at a competitive disadvantage in the global economy with its "go alone approach".

"We called for the government to 'go low, and start slow' but it has chosen to start with a carbon price twice as high as Europe," Mr Cartwright said in a statement.

"Now that the government has locked us into a carbon-taxed economy, the pressure will be on the prime minister to secure a global and fair agreement on pricing carbon emissions.

"If the government isn't able to achieve this, it should rescind the carbon tax," he said.

Master Builders Australia, the peak body for the building and construction industry, said new house prices would rise by at least $5000 as costs increased as a result of the tax.

"The new tax could not come at a worse time - there is a serious undersupply of new housing, and households and new home buyers are struggling with worsening housing affordability and increased cost of living pressures," chief executive Wilhelm Harnisch said.

Meanwhile the peak energy efficiency body said the legislation would save Australian homes and businesses over $5 billion a year.

"A carbon price will actually help businesses, by giving them the certainty they need to invest in changes that are long overdue," Energy Efficiency Council chief executive Rob Murray-Leach said.

"Many homes and businesses have opportunities to cut their energy use by 30 per cent or more."

The Investor Group on Climate Change (IGCC), comprising industry superannuation organisations with $700 billion in funds under management, said the legislation would provide greater regulatory certainty and investment opportunity.

"Passage of these bills will provide a platform for future investment in renewable energy and low-carbon technologies," chief executive Nathan Fabian said.