Prime Minister Julia Gillard says the Government's carbon price scheme will be rolled out from July 2012.
Announcing details of the scheme today, Ms Gillard said the price on carbon would be fixed for a period of three to five years before moving to a cap-and-trade system.
"I'm determined to price carbon," Ms Gillard told a joint press conference with Greens leader Bob Brown and Senator Christine Milne well as independent MPs Rob Oakeshott and Tony Windsor.
"History teaches us that the countries and the economies who prosper at times of historic change are those who get in and shape and manage the changes. The time is right and the time is now.
"There are some people that will say we can't afford to move to a clean energy future, I disagree with that, we can't afford not to move to a clean energy future," she added.
Agricultural emissions will initially be excluded from the scheme but farmers will be compensated for any efforts they make to cut emissions.
The Government is expected to announce more details of the plan, including the initial price, at a later date.
Senator Brown said the announcement was an important step forward in a "nation-building process".
"This agreement is the Greens in action, delivering certainty to the Australian economy, community, investors and the environment after productive negotiations with the Government," he said.
Senator Milne called the framework agreement "a victory for minority government".
"It's happening because we have shared power in Australia. Majority government would not have delivered this outcome," she said.
But Mr Windsor warned his presence at the announcement did not mean he would support any legislation.
"This is very much the start of the process in my view, there's a lot of discussion to take place on this issue, what we've established today is a framework," he said.
"That doesn't mean the game is over ... don't construe, through my presence here, that I'll be supporting any scheme."
Climate Change Minister Greg Combet warned the major stumbling blocks of compensation and pricing remain before the committee.
"Don't get ahead of yourselves, there's a lot of detailed work to do," he said.
"The starting price has not yet even been discussed, the household compensation package has not yet been discussed, support for emissions-intensive trade-exposed industry has not yet been discussed, the treatment of the energy sector has not yet been discussed."
'Broken promise'
Deputy Opposition Leader Julie Bishop says the announcement is a betrayal of trust for the Australian people.
"This represents a fundamental breach of an election promise that the Prime Minister gave solemnly to the Australian people on the eve of the last election," she said.
"She said there would be no carbon price, no carbon tax under any government that she led.
"She has broken the trust the Australian people put in her at the last election.
"It's another example of the Labor Party being in government, but the Greens being in power."
AgForce spokesman Drew Wagner says farmers want more detail on the carbon plan and its likely effect on producers.
"The reality is that whatever scheme comes in, production systems will wear the cost of anything that's fuel-related, energy-related or otherwise, everything to even our fertiliser usage will be felt with the tax," he said.
"So whilst our emissions won't be directly covered, the impost of a trading scheme or operating in a carbon constrained economy still will be felt."
Mr Wagner says more work needs to be done before a price on carbon comes into effect.
"Our thoughts on the announcement today so far is there's still a lot of work to be undertaken to find out exactly what role agriculture will play within these schemes," he said.
"Not only what role we'll have, but also what impact this may have on not only our production systems but our bottom line as well."
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