New research commissioned by Resources Minister Martin Ferguson shows coal will remain the cheapest energy option unless the price reaches $40 a tonne, when cleaner gas-produced power becomes more viable.
But Climate Change Minister Greg Combet, who on Tuesday attended the seventh meeting of the committee working on the pricing scheme, said the starting price for carbon would be "well south of $40 a tonne".
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Mr Combet would not nominate a figure of his own, saying that would be left to intense negotiations during the next four to five weeks.
But he said the government's plan would be the "least cost method" for the economy, compared with the coalition's plan to hand $30 billion of taxpayers' money to polluters, with no assistance to families.
The government is aiming to finalise its carbon price scheme in July, with legislation to be introduced to parliament by the end of the year and a fixed price starting on July 1, 2012.
European lead
Greens senator Christine Milne, who is also on the committee, said the starting price needed to mirror the global market.
She said the benchmark figure was the European carbon price, which was forecast to average 32 euros ($A42.94) from 2013 to 2020.
"We don't want a big disconnect between the Australian and international price."
But she said the Greens had not settled on a dollar figure, which could not be determined until transition measures for industries and households were worked out and reports were received
from Treasury and the Productivity Commission.
Opposition Leader Tony Abbott, who visited the Ford Australia car plant in Geelong, said the carbon tax would be an unwelcome impost at any price, but at $40 a tonne would add $1150 a year to the average family's costs.
"The point of the tax is whatever level it starts at it's going to go up and up and up," Mr Abbott said.
The Californian carbon price is set to start at $US13 ($A12.32) next year and is forecast to hit $US75 ($A71.06) by 2020.
The Australian Chamber of Commerce and Industry's Greg Evans said a $40 price was like "clearfelling the Australian business community".
WWF climate change spokeswoman Kellie Caught said the $40 figure was "in line with what we know needs to be done if we are to reduce our pollution".
But she said a lower price could be effective if coupled with new emissions standards for power stations, more energy efficiency measures, greater investment in renewable energy and support for
households.
Meanwhile, the government is considering a new website as one of the ways to help households deal with a price on carbon.
The website - tentatively titled myretailer.com - would have information about power prices and make electricity retailers more transparent, the climate change committee has been told.
Government climate adviser Rod Sims had stood down from his role on the committee due to his nomination as chairman of the Australian Competition and Consumer Commission.
