The three northern premiers have rejected Liberal Leader Stéphane Dion's plan for a national carbon tax, saying it will just add to the already high costs of energy in the region.

Wrapping up a conference in Yellowknife on Saturday afternoon, all three leaders said Dion's plan would be unfair to those who live in Yukon, Nunavut and the Northwest Territories.

"We think there are better ways to deal with this issue than another tax being applied, especially in the North where the cost of goods and services is already predominantly higher than anywhere else in the country," said Yukon Premier Dennis Fentie.

Nunavut Premier Paul Okalik said that unlike the North, other jurisdictions may have alternatives available.

"But in the North, there really are no alternatives for us in Nunavut to turn to, to get away from diesel generation for power and for heat," he said.

"We'd rather focus on alternatives to get away from fossil fuels. But to add on a cost to very high fuel costs already is just not an option for homeowners in our territory."

Dion's $15.4 billion-a-year Green Shift tax plan would increase costs on fossil fuels such as coal, oil and diesel. But those costs would be offset by broad-based personal and corporate tax cuts.

The plan would initially peg the price of emissions from fossil fuels such as coal, oil and gas at $10 per tonne of carbon dioxide, rising to $40 per tonne in the fourth year.

Northwest Territories Premier Floyd Roland said it would be more productive to fight climate change by investing in alternative energy sources, such as hydro and wind power. A carbon tax is simply "passing on to the end user an additional cost of doing business," Roland said.

With files from the Canadian Press