Impact of ETS on food costs 'will be minimal'

Any increase in grocery prices under emissions trading will dwarf price rises resulting from inaction on climate change, new analysis suggests.

Independent think tank The Climate Institute says the cost of food will rise by less than one per cent under Labor's proposed scheme, an increase of about $1.30 on the average weekly grocery bill.

The institute's Food Prices and Emissions Trading briefing paper says the cost of an extended drought, due to climate change, will be far higher.

The paper cites a study by economist Professor John Quiggin that showed Australia's average food bill rose 12 per cent between 2005 and 2007 due to drought and other severe weather events.

Climate Institute chief executive John Connor says emissions trading is the best way to help keep the cost down.

"What all the credible research shows is that farmers, consumers and producers will be hit hardest in the hip pocket by the impacts of climate change not by ... an emissions trading scheme," he said in a statement.