Australia’s largest industry lobby group has called for the immediate transition to an internationally linked market based emissions trading scheme.

"The Australian Industry Group (Ai Group) today called on all sides of politics to support the immediate removal of the fixed price carbon tax and move directly to an internationally linked emissions trading scheme," Ai Group Chief Executive Innes Willox said.

"This would end the carbon tax and cut carbon costs by three quarters. Electricity prices would drop by about 1.5 cents per kilowatt-hour, an average cut of around 10 per cent for businesses and around the same for households. Australia's emissions targets would still be met, with abatement happening wherever it is cheapest, including overseas.”

Mr Willox said that the move to an emissions trading scheme would ‘slash the uncompetitive burden’ of the tax while allowing the market to deal directly with carbon abatement.

"Ai Group has long argued that an emissions trading scheme is the most flexible path to reducing greenhouse gas emissions at least cost. And we've always said the fixed prices under the current regime are way too high,” Mr Willox said.

Mr Willox bemoaned the comparatively high cost of carbon per tonne, saying that Australian companies are unfairly burdened where their European competitors are now.

Nor did Mr Willox spare the Federal Opposition his ire, saying that the direct action policies favoured by the Liberals would only permit domestic abatement without dealing.

"A sensible resolution is at hand through Ai Group's proposal that would be fully consistent with the targeted reductions in emissions shared by both the major political parties.

"The same environmental benefit can be achieved at a lower cost and it can be achieved simply by bringing forward by two years the date of Australia's already-legislated move to emissions trading," Mr Willox said.