Prime Minister Tony Abbott has vowed to push on with scrapping the carbon tax despite the Senate voting down the measures.
Labor and Greens senators combined to rejected the Abbott government’s package of nine bills to abolish the fixed price on carbon emissions on Thursday.
Mr Abbott said Labor was breaking its commitment to remove the tax.
“The carbon tax is an act of economic vandalism,” Mr Abbott told question time.
“You can’t trust (Labor) anywhere near an economy.”
Greens leader Christine Milne has issued a statement saying a carbon price was important and that a “price on pollution” is the best defence against the more extreme bushfires, droughts and storms of the next century.
“Tony Abbott should now abandon the so-called Direct Action plan, which is little more than a slogan.
“Direct Action will be more expensive than the current market based mechanism and ineffective at reducing carbon pollution.”