MALCOLM Turnbull will use an independent economic report on the Rudd Government’s emissions trading scheme to demand major changes including a better deal for big polluters and tougher emissions-reduction targets as his price for considering support.

The economic report’s release today comes as the Government concedes the Liberals are their only hope of getting the scheme through the Senate, and labels the Greens “irrelevant”.

The squaring-off of the major parties before parliament to decide the fate of the Carbon Pollution Reduction Scheme next month comes as the Business Council of Australia appeals for bipartisanship in the interests of investment certainty, suggesting the financial impost of the new carbon cost should be deferred until the economy returns to growth.

Opposition emissions trading spokesman Andrew Robb will today release a report from the Centre for International Economics that finds the scheme as proposed “threatens the balance sheets of key industries”.

The report says the scheme does not quantify the economic cost in the short and medium term as the economy makes huge adjustments, and does not take advantage of potentially inexpensive ways to reduce emissions, for example through the use of more energy-efficient buildings.

“Kevin Rudd said he would bring in a scheme that would deliver deep cuts and not disadvantage our export industries. Good. He should do it. And we’ll support it. But this report shows the scheme on the table fails on both counts,” Mr Robb said yesterday.

Parliamentary Secretary for Climate Change Greg Combet effectively conceded yesterday that the Government would have to deal with the Coalition to get its scheme through the Senate, saying the Greens had “made themselves irrelevant” by arguing for an unconditional 40 per cent cut in emissions, which without an international agreement, would be economic “lunacy”, and opposing transitional assistance for emissions-intensive, trade-exposed industries.

Mr Combet accused the Liberals of “extraordinary economic recklessness” by refusing to state a clear policy on reducing emissions pollution.

“Failing to articulate what their policy is only encourages uncertainty as to their position and possible future carbon prices. I believe this is demonstrating extraordinary economic recklessness in the name of politics,” Mr Combet said. “The Liberal Party needs to tell Australia exactly how much they propose to reduce Australia’s emissions by, how they will deliver these reductions and how much it will cost. To keep putting off such announcements only encourages uncertainty for business and investors.”

The CIE report supports some aspects of the growing list of Coalition demands, which it believes could protect export industries and deliver a tougher emissions-reduction target than that proposed by the Government by finding new emissions savings in better land and soil management and building efficiency.

In a speech earlier this year, the Opposition Leader claimed he could find emissions reductions amounting to a 27 per cent cut on 2000 levels by 2020, compared with Labor’s proposal of cuts of between 5 and 15 per cent.

Mr Robb is now saying the Coalition’s alternative ideas could generate cuts at least as deep as Labor’s.

Demands being discussed within the Coalition include increasing the compensation for trade-exposed industries to 100 per cent free permits; allowing some flexibility in the nation’s proposed 2020 target, both up and down; delaying the Government’s proposed 2010 start date; and introducing building efficiency and land and soil management regulation to gain extra cuts in emissions that could be added to the Government’s carbon pollution reduction scheme target.

It is also looking at mechanisms by which greater than expected emission reductions by individuals could be reflected in a more ambitious national target. And it will require a solution for the coal industry, which for technical reasons was left out of the Government’s main compensation scheme.

Sources said the Coalition had yet to reach a final decision about whether to propose the sweeping amendments, which could prove attractive to business and possibly to some conservationists, or to declare the Government’s bill fatally flawed.

Mr Turnbull could struggle to unite his party behind proposed amendments. The Liberal and Nationals members of a Senate committee looking at the scheme recently found the Government should “go back to the drawing board” and come back to the Senate next year with a different plan. But the Business Council of Australia, which has continued to support an amended carbon pollution reduction scheme despite public criticism of it from many of its members, appealed to the two major parties to reach a compromise in the interests of business and investment certainty.

“Business needs a bipartisan approach,” a BCA spokeswoman said. “We need the Government and the Opposition to work together. We need the industry assistance measures to address the competitiveness concerns. We need the bill fixed and passed but we need the implementation to be calibrated to reflect the costs to the economy