Mr Coulton also claims the added cost will bring with it no benefit to the environment.

In a report in The Australian newspaper yesterday, big retailers claimed the Federal Government’s emissions trading scheme would act as a de facto tax on groceries by adding 4 to 7 per cent to their price.

The Federal Government yesterday rejected claims, but Mr Coulton admitted saving the environment was going to come at a price to consumers.

“I think people will be willing to pay more if they can see the environmental benefits,” he said.

“But this scheme is going to make things a lot more expensive without helping our environment.”

Mr Coulton claimed higher power bills would also be a result of the Government’s scheme, particularly in regional electorates like Parkes, which rely heavily on fossil fuels for their energy.

“I don’t think people realise that this scheme is going to make electricity more expensive,” he said.

“The alternative is to use less energy, don’t turn the switch on.”

He claimed the emissions trading scheme had been debated too much in political terms and the effect it would have on regional areas had largely been ignored.

“This scheme is going to have a double negative effect on the economy of regional areas,” he said.

“A renewable energy target would be much better and have bigger environmental benefits.”

The Federal Government yesterday rejected the grocery price predictions.

“Those figures are wrong,” junior climate change minister Greg Combet said yesterday.

Mr Combet said Treasury in its modelling of the carbon pollution reduction scheme estimated the impact on food prices would be about 0.1 per cent in the first year or two.

Any revenue the Government would receive from the sale of permits under its scheme would substantially go towards compensating low and middle-income households, Mr Combet said.

Higher-income households, however, would be meeting some of the costs of the carbon price.