Mining giant Rio Tinto has warned the carbon tax is "potentially disastrous" for industry unless a far more generous compensation package is offered than under Kevin Rudd's Carbon Pollution Reduction Scheme.

Rio's managing director, David Peever, says the CPRS design would have resulted in a cost of $3 billion on Rio Tinto's export business.

He said industry accepts changes must be made to cut carbon pollution.

But Mr Peever - who is also a member of the Federal Government's business roundtable on climate change - says cutting pollution will be expensive and in some cases the technology to cut it has not even been developed yet.

"Businesses unable to pass a carbon price through to customers, which is most businesses competing in international markets, would simply have to absorb it," he said.

"Depending on the magnitude of the carbon price, this may be manageable when market conditions are favourable and margins are healthy.

"But when the cycle turns down, it will inevitably be disastrous."

Climate Change Minister Greg Combet described Rio's stance as an "ambit claim".

"I think that's understandable, however the Government is extremely committed to ensuring that we've got a vibrant coal industry in the future and that our industries are competitive so we will discuss the details of any packages with the industry itself," Mr Combet said.

He defended the design of the Rudd Government's CPRS compensation package.

"When the CPRS was developed the government did a very detailed and comprehensive package in consultation with the industry, and that's what we intend to do on this occasion too."

Mr Peever says Australia only contributes about 1 per cent of global emissions.

"To argue that Australia lags the rest of the world is also much more rhetoric than fact," Mr Peever said.

But Mr Combet described the suggestion that nothing is being done internationally to combat climate change as "complete rubbish".

He says for the first time, China is actively debating carbon reduction targets and other countries are already fighting pollution.

"Ten states in the US have committed to emissions trading commencing next year as well, so carbon pricing is going on throughout the world," he said.

"There's already 32 countries that have an emissions trading scheme in place, carbon taxes have been in place in many economies in Europe for many years."

Meanwhile, Opposition Leader Tony Abbott has warned frontbencher Malcolm Turnbull to follow the Coalition line on climate change, opposition to an emissions trading scheme and support for the Opposition's "direct action" plan, paid for by budget cuts.

Mr Turnbull lost his leadership of the Liberal Party in 2009 over his support for Labor's CPRS and last week he said he retained his support for an emissions trading scheme.

"Malcolm obviously is a senior member of the shadow cabinet and the view of the shadow cabinet is that we support direct action," Mr Abbott said this morning.