AUSTRALIANS could buy a stake in the protection of endangered tropical forests under a groundbreaking scheme being devised by former Australian of the Year Tim Flannery.

Professor Flannery outlined his proposal yesterday in a private meeting with Prime Minister Kevin Rudd's hand-picked climate change adviser, Professor Ross Garnaut.

Professor Flannery — Australia's most prominent environmental campaigner — wants to set up an internet-based carbon market with a pilot scheme to be run in Papua New Guinea.

In a paper prepared for Professor Garnaut, Professor Flannery says 20% of global carbon emissions come from the wholesale destruction of tropical forests, so preservation must be part of any effective response to climate change.

His scheme envisages that households and businesses would be able to secure the protection of forests and the replanting of trees through an auction scheme.