The federal government is abolishing the carbon tax “because it has damaged our economy, and increased energy costs for businesses and families”, he said during his trip to the US.

“Discussion about developing our natural resources often goes hand in hand with conversation about climate change and impacts on the environment,” Abbott said.

“It is prudent to do what we reasonably can to reduce carbon emissions. But we don't believe in ostracising any particular fuel and we don't believe in harming economic growth.

“For many decades at least, coal will continue to fuel human progress as an affordable energy source for wealthy and developing countries alike.”

Abbott praised the US’s record in resources and energy development despite being at odds with President Barack Obama’s stance on making a 30% cut in US carbon dioxide emissions by 2030.

“Australians have followed closely the success of America's shale energy revolution that has led to the United States once again becoming one of the world's largest producers of oil and gas,” he said.

“From the other side of the ocean, Australia shares with you a common interest in powering that future with abundant and reliable energy.

“Australia should be an affordable energy superpower, using nature's gifts to the benefit of our own people and the wider world.”

Greens Leader Christine Milne said Obama had shown up the Australian Prime Minister as completely out of step on global warming.

“Barack is moving forward, but Tony is stuck in reverse,” she said.

Abbott said Australia was replacing the carbon tax with a $2.55 billion fund that would prioritise cost-effective, targeted means to reduce emissions such as afforestation, soil carbon and cleaner power stations.

“It's an incentive-based approach which will support Australian businesses and households to lower their energy costs at the same time as reducing Australia's emissions,” he said.