But any compensation for businesses adversely affected by the implementation of a scheme was the responsibility of the Federal Government, Mr Iemma said.

The Premier's comments follow NSW Treasurer Michael Costa's speech on Thursday night to a business group, where he said the cut in greenhouse gas emissions recommended by climate change adviser Ross Garnaut would cost hundreds of billions of dollars.

Mr Costa said NSW Treasury modelling showed the 80 per cent cut by 2050 recommended by Professor Garnaut would cost $430billion and slash Australia's economy by 4per cent over the next 20 years.

The Federal Government will release its own economic modelling mid-year.

It has said it is aiming for a 60per cent cut in emissions by 2050, which would cost $280billion.

Mr Costa also said if the Federal Government accepted Mr Garnaut's recommendation not to compensate industries adversely affected by carbon trading, it would damage the global perception that Australia was a country free of sovereign risk to investors, Fairfax reported yesterday.

"There is a way to establish a carbon trading scheme and the way to do it is to transition those industries that will be affected," Mr Iemma said.

"The Treasurer was pointing out there are two ways to do it... you do it by ensuring you cut greenhouse gas emissions and you still have investments for jobs.

"And that's the point that he was making. Do it our way."

The cost of not taking action on greenhouse gases far outweighed the cost of taking action, Mr Iemma said.

Total Environment Centre executive director Jeff Angel said Mr Costa was a known climate-change sceptic and called on him to release all the NSW modelling.

"He throws big figures around, but the real impact over such a long period is very, very small.

"Significant economic and individual income growth continues and major new green industry is created."

NSW Greens MP John Kaye said there was no reason to trust the figures because Mr Costa had refused to reveal what the calculations were based on.

"A one-year delay in doubling the economy a marginal reduction in economic growth in order to avoid climate change would be a good investment in reducing the risk of devastating consequences," Mr Kaye said.

"Treasurer Costa does not accept the scientific consensus on climate change. "He should butt out of the debate until he finds something intelligent to say on the topic."