Regions that suffer under a new emissions trading scheme (ETS) will get a helping hand from the government and rewards will go to industries investing in clean power, the much-anticipated Garnaut report says.

But the report rules out compensating coal fired power stations, The Australian newspaper reports.

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Professor Ross Garnaut's 600-page draft report on climate change, of which the make-up of an ETS is a major focus, will be publicly released later today.

While it will assess the creation of an ETS, it will not contain specific emissions targets ahead of Treasury modelling which inform the final report in September, The Australian says.

In the draft report, Prof Garnaut is expected to recommend the new ETS cover as much of the economy as possible, including the transport sector, and to canvass several options about how it might be phased in.

One option will be that the price of carbon could be fixed for a two-year introductory period, until 2012, before a true carbon market develops.

Another is the offer of assistance for power generators that invest in new technology to lower their emissions, for example carbon capture and storage, coal drying or gasification, The
Australian says.

Prime Minister Kevin Rudd has warned the introduction of an ETS will involve some tough decisions.

But he says it is important the government acts in the interests of Australia's long-term economic and environmental future.

Recent debate on plans to introduce an ETS have largely centred on whether petrol should be included, and how households and industry should be compensated for higher prices.

Mr Rudd yesterday assured both households and the business sector that they would be supported during the transition to an ETS.

"On emissions trading, we've been absolutely clear cut. This will be a tough decision, we recognise that, and we won't be walking away from it," Mr Rudd said.

"We will, however, ensure that we provide support to households and business on the transition period ... while preserving the integrity of the scheme that we arrive at."

Opposition climate change spokesman Greg Hunt said he would be combing through the Garnaut report for advice on how Australia could act globally to forge agreements to cut emissions.

He said the coalition supported the concept of an ETS, but did not want it to be a "tax binge".