The report, by the Department of Climate Change, found emissions growth had slowed over the past year because of the financial crisis, but that Australia's output of greenhouse gases was still rising, with an average annual increase of 1.6 per cent between September 1998 and March 2009. In 2008 Australia produced the equivalent of 584 million tonnes of carbon dioxide, compared with 553 million tonnes in 2000.

In the absence of any action, the department believes emissions will have risen to 664 million tonnes by 2020 - 14 per cent more than the current level and 20 per cent more than in 2000. To achieve a cut of 5 per cent below 2000 levels, Australia would need to produce about 59 million tonnes less than today. To achieve a 25 per cent cut, emissions would need to be about 170 million tonnes lower.

But because Australia's economy and population will have grown considerably by 2020, the job will be much tougher. The paper said that to meet the lower target, the nation would need to avoid producing 138 million tonnes by 2020. It would need to avoid producing 249 million tonnes to meet the larger target.

Climate Change Minister Penny Wong said the rise in emissions that would occur without the scheme would be equal to doubling the number of cars on the roads over the next decade.

Legislation for the scheme is due to be voted on in the Senate on Thursday, when it is likely to be defeated. The Coalition is divided over whether such a scheme should be adopted.