BHP Billiton Ltd (ASX: BHP) chief executive Marius Kloppers said on Wednesday that the federal government should start treating carbon price as revenue neutral since effective measures on carbon emission reduction would mostly lead to considerable cost impact on consumers.

Speaking before audiences gathered at the Australian British Chamber of Commerce in Sydney, Mr Kloppers stressed that carbon reduction scheme is an energy consumption issue, which calls for a modification on consumer behaviours by cost impacts.

The BHP head conceded that the issue is quite political and no easy answer would come out of it as he stressed that "all of us who care about this issue need to also recognise that making a difference comes at a price."

Along the way and in order for the country to still emerge competitive, Mr Kloppers said that Australia needs to look for other viable means of energy production once world carbon price becomes too expensive to be used for mass energy needs.

He noted that up to 90 percent of carbon emissions contributed by the counties electricity sector were largely caused by coal fired power stations across Australia as he asserted that we "will need to look beyond just coal towards the full spectrum of available energy solutions."

Mr Kloppers stressed that "failure to do so will place us at a competitive disadvantage in a future where carbon is priced globally."