By a staff reporter

The Gillard government's plan to introduce a price on carbon by July 2012 would see Australia join the global shift to a green economy at the right moment, according visiting European Commission President Jose Manuel Barroso.

In a speech delivered at Canberra's Australian National University on Tuesday, Barroso said that carbon pricing and trading was an opportunity for nations "to firmly stake a place at the centre of the next great economic and political theme."

"Those that create and dominate the new markets supporting this transition to the low-carbon economy stand to gain a great deal: competitiveness, growth and jobs. the potential to increase the efficiency of clean energy markets, boost medium and long-term competitiveness and improve the investment mindset, as well as benefiting the environment," he said.

"Others from China to large parts of the United States are building momentum for carbon pricing and trading. Australia is joining this effort at the right moment."

Barroso told the gathering that carbon pricing and trading would enable more efficient markets and would force all nations to allocate their resources more effectively.

"In this way a carbon price helps us deal with the pressures of the globalised economy as well as the environmental threat. No nation which looks to trade as a means to prosperity can afford to overlook this," he said.

In a separate speech, also on Tuesday, Barroso told the European Australian Business Council that Europe's decision to act on climate change transcended ideological divides. 

"Our approach to climate change is ...built on science but tailored to economic realities and possibilities. You could say Europe is pursuing green reforms and innovation for three reasons: science, self-interest and our sense of responsibility to future generations," he said.

"To us it is clear that all emitters need to take action. That is why we welcome Australia's efforts to price and trade carbon. It is for Australia to decide the mechanisms but the goal is fundamentally correct. And in particular we hope to develop the appropriate linkages between EU and Australian systems.

"It is clear that carbon pricing and trading is an opportunity for nations to firmly stake a place at the centre of the next great economic and political theme faced jointly by all of us. Those that create and dominate the new markets supporting this transition to the low-carbon economy stand to gain a great deal: competitiveness, growth and jobs," Barroso said.