A gradual implementation of the carbon tax is the favoured scheme of industry groups led by the Business Council of Australia.

The group said that to lessen the impact on Australia's businesses and households, the carbon tax can start at A$10 ($10.70) a metric ton and an increase can be agreed upon in a monthly or quarterly intervals of implementation.

The Business Council is led by chief executive officers of Australia's top 100 companies including BHP Billiton, Rio Tinto, among others, who said that it is understandable that Australia's policy to comply and bring down green gas emissions in the country.

The business industry proposed that a full compensation for the tax to ensure this environment policy should make sure that it does not peril investment and trade.

The A$10 levy should be followed by "a modestly increasing trajectory to reduce the need for compensation to households and business," the group said in a statement posted on its site.

The step-by-step approach is needed "in recognition of the limited opportunities for domestic emissions reduction in the early years."

In a related Bloomber report, Climate Change Minister Greg Combet said the government welcomes the business group's support for the carbon policy although the government has yet to decide on the price and other details.

Price Mechanism

"It's very important that the Business Council has got the view that carbon price is appropriate and a market mechanism to achieve it is the best way to go," Combet told reporters during a two-day meeting of the Multiparty Climate Change Committee in Canberra that started today. He said that talks so far have been "constructive."

The committee of lawmakers is advising the government on what the price of carbon should be under the emissions trading system.

Australia, also the largest exporter of coal has set a target of generating 20 percent of the nation's energy from renewable sources like wind and solar by year 2020.

Prime Minister Gillard wants to start an emissions trading system in July with a fixed per-ton charge for the first three to five years before an open market begins.

Details of her plan will be released by early July, including compensation to households and businesses and funding for clean energy projects, Mr Combet noted.