The Sustainability Council says the Government is vastly underestimating the cost to the taxpayer of recent changes to the Emissions Trading Scheme.
Earlier this month the Climate Change Minister announced the cap on carbon prices, known as the fixed price option, will be held at the current level until a review in 2015.
The Government estimates the fiscal cost of the changes is just over $328 million in the next three years.
However Sustainability Council executive director Simon Terry says the Government used a carbon price of $6 per tonne when estimating the costs of the changes.
He says the Government has until recently used a $25 per tonne figure.
Mr Terry says at $25 per tonne, the total cost to the taxpayer would be $1.3 billion.