As the Coalition prepares to vote down the scheme on Thursday, it will argue that a different approach that did not hit electricity generators so hard could cut the increase in annual household electricity bills to just $8 in the first year, rising to $44 in the fifth year.

The Government scheme is estimated to increase electricity bills by $4-5 a week, or up to $260 a year. This and a smaller rise in gas bills would be offset by about $6 billion a year in compensation for more than 5 million low and middle-income households.

The changes proposed by Frontier Economics, commissioned by the Opposition and independent senator Nick Xenophon, would shift the scheme from its current design to what is known as a baseline and credit intensity-based model.

Rather than capping greenhouse gas emissions, intensity-based schemes involve several industry-specific targets to reduce emissions intensity.

The Opposition said the changes proposed by Frontier meant that rather than an abrupt and large jump, there would be only a small and gradual increase in power bills.

It would give households and businesses more time to reduce their electricity use by buying more efficient appliances, insulating buildings and making other adjustments.

The need for compensation payments to households would also be greatly reduced, decreasing the amount of fiscal ''churn''.

Hundreds of thousands of small businesses would also have much lower increases in their power bills.

Opposition Leader Malcolm Turnbull said the Frontier report showed why Prime Minister Kevin Rudd should not ''arrogantly dismiss'' constructive suggestions to improve the design of the scheme.

''If Kevin Rudd genuinely wants to protect both the environment and Australian jobs he should be prepared to sit down and negotiate with the Opposition,'' he said.

The Government has already rejected the Opposition's offer to negotiate on nine principles, setting the scene for this week's rejection.

The Southern Cross Climate Coalition, including unions, welfare groups and green groups, yesterday launched a campaign calling for the emissions scheme to be passed. It was backed by the Investor Group on Climate Change, a Australia-New Zealand body representing more than $500 billion in investment.