The forum's report - the first of its kind to look at economic responses to changes in the energy mix - concludes there is no reason why reductions in greenhouse gas emissions should make electricity unaffordable.

It found the economy could continue to grow by capturing carbon dioxide and using alternative renewable energy sources such as wind and solar.

CSIRO's Paul Graham said the forum's conclusion that strong economic growth could continue despite significant emission cuts was one of the most important outcomes of recent research.

The energy futures forum was established in 2004 and involves national energy and transport companies, energy-generation industries and groups representing social and environmental concerns.

Members include oil and gas companies BHP Billiton, Woodside and Origin Energy, mining giant Rio Tinto, and environment group WWF Australia. The Public Interest Advocacy Centre and Australian Council of Social Service are also involved.

The group created nine scenarios, for which the CSIRO and the Australian Bureau of Agricultural and Resource Economics (ABARE) independently modelled economic outcomes.

In most of the scenarios, atmospheric greenhouse gas concentrations stabilised at 575 parts per million (ppm) of carbon dioxide by 2100, requiring a reduction in greenhouse gas emissions of about 35%.

However, one scenario required a 50% cut in emissions, while another factored in higher oil prices, and still another looked at the compliance of non-OECD countries to a global carbon tax.

In all scenarios greenhouse emissions were reduced by sequestration of emissions from coal-fired power generators or using nuclear power and renewables such as wind or solar, or a combination of all technologies.

Graham said all groups involved agreed that climate change was the biggest challenge for the energy sector and that carbon constraints would be a big issue for Australia.

However, low-emission technologies such as carbon capture would not necessarily be the first to be used, even if viable by 2010.

Instead, low-cost options such as a transition to natural gas would be one of the first steps to cutting emissions, he said.

Graham conceded consumers would pay more for energy, perhaps as much as 50%, because of a shift to low-emission technologies, but estimated such a rise in wholesale electricity prices would translate to only a 10-15% increase in household electricity bills that would be "easily bearable."