Australia is starting work on a carbon trading plan that will cover up to three-quarters of the country's output of greenhouse gases, the government announced Tuesday.

The government is beginning the "detailed design" of a plan that will cover almost all industrial, energy and mining emissions, as well as some emissions from transportation and other energy uses, Environment and Water Resources Minister Malcolm Turnbull said in a release.

Australian PM John Howard says the country will introduce a carbon trading plan.

Carbon trading is a means of reducing emissions by capping them, and allowing emitters to buy and sell the rights to emit. That puts a price on emissions, and enables efficient emitters to sell rights to emit that they don't need.  

But no targets were set, which means the impact of the plan is impossible to assess.

Prime Minister John Howard, facing a re-election fight, announced the government's intent to adopt a trading plan in one line in a video posted on YouTube.

"Stabilizing atmospheric concentrations of greenhouse gases will be difficult but not impossible," he said. The small-c conservative head of the Liberal Party of Australia emphasized that the government would be careful of the economy in its green plans.

"We do not have to sacrifice our economic prosperity to tackle the problem," he said.

Solar panels, water tanks for schools

Most of Howard's short speech was devoted to new green measures costing about $570 million Cdn over five years.

One will give every school in the country a voucher for about $45,000 to help install solar hot water systems and rainwater tanks.

The second will provide $900 rebates for up to 225,000 homes to install solar and heat pump water heaters.

"Energy used to heat water is the single largest source of energy-related greenhouse gas emissions from Australian homes, accounting for around 28 per cent of a home's energy use," Turnbull said.

The government also will start a $24-million program to start a streamlined system for emissions reporting by Australian companies.