A report from the Chamber of Commerce and Industry WA has forecast that a national emissions trading scheme would have the most impact on the power generation, transport and manufacturing industries.
The report also said the cost of most goods and services, including electricity and petrol costs, is expected to rise.
The study, headed by former Australian Bureau of Agriculture and Resource economics chief Dr Brian Fisher, found that an ETS would have a profound impact on WA's energy intensive industries and therefore a significant impact on the economy.
Using an price of carbon AU$35 per tonne of carbon dioxide equivalent, the study estimated WA's gross state product would decline by 3 per cent and emissions reduced by 8 per cent relative to reference case levels at 2010.
However, NETT modelling suggested the economic impact would be reduced if the carbon price was capped at between $25-$35/t and if compensation was provided to trade exposed and energy intensive industries.
CCIWA executive director policy Diedre Willmott said the report aims to raise the awareness of the impact of climate change policy on local industry, and to assist businesses to prepare for imminent policy changes.
"The business community is going to have a major role in addressing climate change," she said.
Two member surveys, undertaken as part of the project, found that only 6.6 per cent of business monitored their greenhouse gas emissions, with about 16 per cent of businesses having greenhouse management measures in place.
The majority of respondents were unsure about which form of emissions abatement scheme the government should adopt, with more favouring and emissions trading systems over a carbon tax.
The report said that the results of the surveys indicated a low understanding of climate policy issues, and a low level of greenhouse gas abatement measures.
