Making the worst carbon offenders pay the cost of the damage they afflict upon the environment will help boost jobs by creating a new industry in Australia, the prime minister has said.

According to the Sydney Morning Herald, Julia Gillard, who is preparing to visit China to discuss measures to cut greenhouse gas emissions, claimed that the Emissions Trading Scheme will open up more economic opportunities.

"We can certainly work with industries to transition to a clean energy economy and in that clean energy economy there will be more jobs," Ms Gillard told ABC television.

However, opposition leader Tony Abbott suggested that while jobs may be created in one sector, others will be lost in important industrial centres in Australia that will be hurt by the tax scheme.

Ms Gillard recently tackled claims that thousands of jobs could be lost in the southern manufacturing towns of Whyalla and Port Pirie if the carbon price plan goes ahead, saying that the suggestions were "completely untrue".

Posted by Sarah Dixon