It says droughts and other extreme weather events, which could potentiallyi increase under climate change, have recently increased grocery shopfront prices for lamb by almost 60 per cent and tripled the price of bananas.

But it says UK and Australian analysis of emissions trading schemes found average grocery prices would face significantly smaller rises.

"Hysterical claims by some politicians and business lobbyists of food prices sky-rocketing because of action on climate change that limits and prices carbon pollution are just not supported by publically available, credible evidence," Climate Institute CEO John Connor said.

"Making big polluters pay through an emissions trading scheme, as part of a global effort, is the best way to manage the risks of climate change and the threat it poses to food prices and farming productivity.

"What all the credible research shows is that farmers, consumers and producers will be hit hardest in the hip pocket by the impacts of climate change – not by policies that limit and price the carbon pollution through an emissions trading scheme.

"An emissions trading scheme is part of the solution – not part of the problem."

To support its claim, the Climate Institute says that in the last quarter of 2009 fruit prices rose 16 per cent because of poor growing conditions.

"Those conditions will get tougher and ultimately near impossible in our Murray Darling foodbowl if global warming gets over 2 degrees above pre-industrial levels, and especially if it approaches 4 degrees," Mr Connor said.

The group also cites the Garnaut Report as warning that unmitigated climate change would all but wipe out farming in the Murray Darling Basin by the end of the century.