Julia Gillard says Opposition Leader Tony Abbott's vow to axe Labor's proposed carbon tax would damage Australia's investment reputation in international markets and cost jobs.
The prime minister said rolling back a price on carbon would deal a "damaging blow" to the economy in the long term.
"That message to international markets would be Australia is not a safe and secure place to invest," she told ABC Radio.
"You make investments on the basis of a carbon price and then Mr Abbott comes in and recklessly sweeps that away."
The scrapping of a carbon tax a year after it was introduced would be "dreadful" for Australia's international investment reputation, Ms Gillard said.
Last week, the federal government announced its plan to introduce a fixed price on carbon from July 2012 before introducing an emissions trading scheme (ETS) three to five years later.
Ms Gillard said scrapping the regime would be "dreadful for the businesses that have made investment decisions on the basis of a carbon price, particularly in our energy sector, where we need to see investment".
"Directors, businesses, boards would make decisions where they would start employing people and Mr Abbott would come and sweep that away, recklessly stranding those investments and losing those jobs."
The government planned to eventually deliver an ETS where the market priced carbon, Ms Gillard said.
"Yes, there will be a period where the price is fixed, effectively like a carbon tax, but we will end up exactly where we promised Australians we would go."
