But the prime minister, whose government has refused to adopt the Kyoto Protocol on greenhouse gas emissions such as carbon dioxide which are believed responsible for global warming, said Australian industry had to be protected.

"All of my government's many initiatives to tackle global warming and its symptoms are sensitive to the nature of our industries, our major power sources and our natural abundance of fossil fuels," he said.

"We are not going to sell out the many thousands of workers in the mining and power generation industries by hastily agreeing to proposals that unfairly disadvantage Australians."

Howard said while climate change was undeniable, "knee-jerk reactions that harm the national interest" were not the answer.

But he said part of the solution would be a global carbon trading system.

Under such a system, companies wishing to exceed limits on their carbon dioxide emissions could buy the right to do so from firms with lower outputs.

Howard said a joint business and government taskforce was working to design an emissions trading system.

Climate change has become a major issue ahead of national elections later this year, with Howard and opposition Labor leader Kevin Rudd announcing plans to probe the country's water shortages and global warming, respectively.

Separately, the Western Australian government is considering imposing a carbon tax on the state's alumina industry.

Western Australia, which is booming thanks to worldwide demand for its mining resources, is the world's largest supplier of alumina.

The government is considering placing a tax of up to 25 dollars a tonne on alumina, a move which would cost the industry some 200 million dollars annually, The Australian newspaper reported Monday.

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