By James Grubel

CANBERRA, May 31 (Reuters) - Australian Prime Minister John Howard took delivery of an official report on carbon trading on Thursday, and media said it called on Canberra to introduce trading by 2011, rather than wait for a global system.

The report, which will form the basis of the conservative government's response to climate change, came after Howard said for the first time he would consider setting a national target for carbon emissions, which are blamed for global warming.

"This is one of the most eagerly awaited reports that's been presented to the government," Howard said on Thursday.

With elections looming and his coalition's poll standing at record lows, the veteran prime minister is under pressure on the environment. Labor Party rival Kevin Rudd is promising to slash carbon emissions by 60 percent by 2050 and to sign the Kyoto Protocol.

Howard set up the inquiry into climate change and carbon trading six months ago to find ways of pricing carbon pollution without hurting the nation's economy. Australia is the world's biggest coal exporter.

He has regularly said he would be willing to embrace carbon trading, but only as part of a global trading system.

Carbon trading usually involves putting a price and strict limits on pollution, allowing companies that clean up their operations to sell any savings below their allocated level to other companies.

Australia's Ten TV network said the prime minister's task force on carbon trading -- made up of top bureaucrats in liaison with business -- had recommended that Canberra set up its own carbon trading system by 2011, initially fixing the price of carbon at A$20 a tonne ($17/tonne).

Australia's Climate Institute said on Monday the price would need to be above A$10/tonne to provide enough incentive for investment in clean energy.

A Citigroup report said it expected Howard to commit to carbon trading before 2012, but said a price below A$20 would be too low to encourage clean energy and would lead to uncertainty for electricity generators, resulting in higher power prices.

Green groups want Howard to commit to cut greenhouse emissions by 30 percent of 1990 levels by 2020, and by 80 percent by 2050.

With no domestic nuclear power, Australia relies on coal for about 85 percent of its electricity, with less than 4 percent produced from renewable energy sources.

Howard, who along with the United States has refused to ratify the Kyoto Protocol, which sets binding limits on greenhouse gas emissions, said on Wednesday he could set an emissions target if the government introduced carbon trading.

"If we move towards an emissions trading system, that will of necessity involve a long-term target of some kind," he told a mining industry dinner.

Howard has yet to say when he will release the carbon report or announce the government's response. ($1=A$1.21)

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