Gillard, whose fragile coalition government will sit in parliament for the first time on Tuesday, said she would personally chair a cross-party committee to study ways of slashing greenhouse gases.

"As a government we have consistently said that in order to tackle climate change, in order to cut carbon pollution to the extent that we need to put a price on carbon," Gillard told reporters.

"A carbon price will create an incentive to reduce emissions, drive investment in renewable and low emissions technologies, create certainty for business investment and begin the adjustment of our economy to a cleaner energy future."

Gillard, Australia's first female leader, said the committee would examine ways of penalising carbon production, including an emissions trading scheme, a carbon tax or a hybrid of both.

The committee will also consider Gillard's pre-election suggestion of a 150-strong "Citizen's Assembly" to look at climate initiatives, which met with a poor response.

The ruling Labor party's failure to pass emissions trading laws in its first term sparked a slide in its popularity, which prompted the ousting of ex-prime minister Kevin Rudd in favour of Gillard in a backroom revolt.

But Gillard's "Citizen's Assembly" idea was one of the low points of her election campaign, which ended in the first hung parliament since 1940.

Gillard scraped back into office by scrambling a coalition government with the environmental Greens party and rural independent MPs. Both groups are represented on the new committee.

The new government has already been hit by wrangling over the speaker's position, which threatens to cut Gillard's advantage by one seat to 75 against 74 in the 150-member lower house.

Moves to introduce carbon-pricing were given extra impetus this month when Marius Kloppers, chief of the world's biggest mining company BHP Billiton, a major coal producer, gave his surprise support.

Australia is the world's worst per capita polluter and the top exporter of coal, which is burned to generate power.

Environmental issues rate highly among Australian voters who have been hit by a decade-long drought in key farming areas, the 2009 Black Saturday bushfire disaster and a choking dust storm that enveloped Sydney last September.

Many Australians are also facing threats to waterfront properties as rising sea-levels erode cliffs and beaches. The Greens party won a record share of the vote at the August 21 elections, including a seat in parliament.

Australia has committed to reducing pollution by five percent from 2000 levels by 2020, in line with worldwide efforts to cut the production of gases blamed for global warming.

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