General Electric (NYSE: GE) backed the Australian carbon tax, which the government will start to collect on July 1. GE said on Monday that it would allocate more funds to pursue carbon reduction technologies.

"I applaud the Australian government for having the courage to go through with it because I think over the long run, the world is going to be better served if there is a cost associated with the production of carbon," GE Vice Chairman John Rice told ABC.

Australian companies are protesting the high carbon tax that would initially be at $23 a tonne. They are pushing the federal government to reduce the tax to $10 a tonne, but government insisted on the $23 price.

Mr Rice said a trading mechanism is needed to cut carbon emissions and encourage the development of new technologies.

"It takes gutsy politicians and so we applaud the Australian government, the prime minister for following through." Mr Rice said.

"It takes leadership and if you wait for the world to act in unison, it will never happen," he added.

He cited the case of China, which he said would take some time to put in place a national carbon emissions trading scheme. China is the world biggest emitter of greenhouse gas.

He explained that it would take China a longer time to establish a national carbon emissions trading scheme because many Chinese do not have yet any access to basic forms of power generation which would be a higher priority for Beijing authorities before the national government goes into more sophisticated things that the Australian government has done such as put in place the carbon tax.