Released yesterday Garnaut’s Climate Change Review report called on Australia to aim for emissions cuts of 5% by 2020.

Garnaut said the cuts could be dependent on an international agreement towards tackling climate change and the failure of the international community to take action could “haunt humanity until the end of time".

MCA said the Garnaut report identified the three critical features of an effective national and global response to climate change: an efficient and effective emissions trading system; a credible global agreement which would cover all major emitters; and “breakthrough” technologies that can lower the emissions of existing energy sources.

The industry lobby group said the failure to include any of these pillars would be a recipe for self-induced market failure.

Earlier this year the Rudd Government took its first steps towards an emissions trading scheme by releasing a green paper.

It called for public submissions which saw coal miner Centennial Coal voicing its concerns over captive coal mines.

The miner said captive coal mines would need to be compensated under a carbon trading scheme, or they could risk closure.