RESPONDING to climate change through a carbon trading scheme will be up to everyone in the community, not just big business, says Prospect MP Chris Bowen, who is also the Assistant Federal Treasurer.

The Federal Government released its green paper on a carbon pollution reduction scheme (CPRS) this week, which will see big business able to buy and trade permits for each tonne of carbon they emit to regulate their carbon emissions.

Only 1000 of Australia's biggest businesses, those emitting 250,000tonnes of carbon each year, are expected to require permits at first.

But Mr Bowen said a number of these were likely to have outposts in western Sydney, in places such as the Wetherill Park/Smithfield industrial estate.

``It's possible the permits might have flow- on effects to local branches of the bigger companies and local employees, but that doesn't mean there will be any commercial disadvantage,'' Mr Bowen said.

``Companies that might feel it would be cheaper to work overseas where there isn't a permit system are classed as `trade-exposed' and could be provided with a number of free permits.

``But what we really want to see in areas where there is room for industrial growth like Wetherill Park is encouraging new `green' industries, which are really underdeveloped in Australia.''

Mr Bowen said money raised from the sale of permits would go ``cent for cent'' back into initiatives to reduce the impact on residents.

``We will be ensuring the cost of fuel doesn't increase due to CPRS for at least five years to give residents a chance to consider their options like buying a smaller, more fuel efficient car, or a hybrid, when the family car needs to be replaced,'' he said.