Australia should end its bickering over a carbon price and move to an emissions trading scheme (ETS), the head of a manufacturing lobby group says.

Australian Industry (Ai) Group chief executive Innes Willox says the fixed carbon tax should be scrapped, with the policy changed to an internationally linked ETS where markets determine the carbon price.

Mr Willox said carbon costs on business would fall by 75 per cent, while electricity prices would drop by an average 10 per cent for business and households.

"Australia's emissions targets would still be met, with abatement happening wherever it is cheapest, including overseas," he said in a statement on Thursday.

"Full emissions trading without the carbon tax element would slash the uncompetitive burden that has been imposed on Australian industry and the Australian community and which is dampening jobs growth."