The head of one of Australia's biggest banks has thrown his support behind the proposed carbon tax.

National Australia Bank chief executive Cameron Clyne says there is bipartisan agreement that carbon levels need to be cut by 5 per cent by 2020.

Mr Clyne says he is not a climate scientist so he cannot say which of the two policies on the table would cut achieve the 5 per cent target.

However, he told a forum in Melbourne that from an economic perspective the Government's plan is better than the Opposition's.

"If you're asking for an economic assessment of the two, the carbon price followed by an ETS (emissions trading scheme) is economically superior to the direct action policy," he said.

"It will drive certainty, it will drive investment, so as a straight comparison between the two, that's the choice."

But the chief executive of Rio Tinto, Tom Albanese, has warned the Federal Government to be cautious in its approach to the carbon tax.

Mr Albanese told a business lunch in Perth that it is courageous and noble the Government is trying to take the lead, but global carbon emissions will not be reduced unless the United States, China and India also play a part.

He says the Government should refrain from experimenting with its economy and any carbon price should be modest.