Abbott's conservative government faces resistance in the Senate to its plan to remove the 24.15 Australian dollar (USD 22.39) tax that Australia's 260 largest polluters pay for every metric ton of carbon dioxide that they produce.
The tax was introduced by a previous government in 2012 as a transitional measure before Australia was to join the European Union's carbon emissions trading scheme in mid-2015.
Abbott wants to replace the carbon tax with a so-called direct action policy in which polluters would be paid taxpayer-funded incentives to reduce their emissions. Polluters would face no financial penalty.
The Environmental Protection Agency is giving customized reduction targets to each state, then leaving it up to those states to develop plans to meet their targets.
"What the Unites States is doing is taking sensible direct action steps to reduce its emissions, which is exactly what this government is proposing to do," Abbott told Parliament.
"It's not sensible to protect the environment by damaging the economy and that's why neither the United States nor Australia should have a carbon tax," he added.
Critics of Abbott's direction action policy argue it would be too expensive and unlikely to achieve the government's goal of slashing Australia's greenhouse gas emissions by 2020 to 5 per cent below 2000 levels.
Australia is one of the world's worst greenhouse gas emitters per capita, largely because it relies heavily on abundant reserves of cheap coal for electricity.