Australia's path toward emissions trading is being drawn up, with the Rudd Government unveiling its long awaited Green Paper on climate change.
Motorists are being warned to be wary of the Rudd Government's plans to slash the fuel excise under an emissions trading scheme, set to start up in 2010.
Climate change minister Penny Wong says petrol will be included in a future carbon trading program, but the price will be kept down through offsets to the excise.
However shadow environment minister Greg Hunt says it is just a political stunt.
"There will be a new petrol tax, but just not until after the election. Motorists will face a new petrol tax, it will be coming.
"In the meantime they've adopted our approach of an offset on excise.
"What we've said for a long while is if you're going to do that, then do that on a permanent basis, not keep this as a hanging new petrol tax over motorists."
Mr Hunt also said any carbon trading scheme would have to ensure the electricity sector isn't grossly affected as well as making sure low income families, pensioners and farmers are provided for.
"You have to take care of low income Australians. You have to make sure mums and dads, and then secondly pensioners and farmers, are not slugged.
"But let's be clear that the paper itself refers to 16 per cent rise in electricity costs and in addition to that we'll see a new tax on petrol in the very short term."
Ms Wong says the community is being well looked after, with tax breaks projected for low and middle income households.
"Every cent raised will be used to help households and business as they make the move to a clean energy future."
The cost of living is set to rise by one per cent in the first year of the scheme and petrol prices will go up as well.
Ms Wong says drivers won't feel the pain though, because the fuel excise cut will level out the cost.
Reaction has been mixed but green groups are slamming the plans, saying it is not complete without serious investment in renewable energy.
Lobby groups are generally welcoming the Government's draft plan for an emissions trading scheme but organisations from The Climate Institute, The Australian Chamber of Commerce & Industry to The Australian Trucking Industry all have their own agendas and have presented a raft of suggestions for Labor's final proposal.