Low-carbon industries could face a drop in investor confidence when the government reviews emissions targets, MPs warn.
The Environmental Audit Committee (EAC) welcomed the decision earlier this year to accept recommendations by the government's climate advisers to set the latest in a series of five-year "carbon budgets" at the equivalent of a 50 per cent cut by 2025.
However the government's plan to review the decision on the fourth carbon budget in 2014, which could see it relaxed, risks upsetting efforts to cut carbon emissions, they warned.
There were concerns ahead of the announcement in May on the fourth carbon budget that it would not be adopted amid a split within the Cabinet over whether the target would be bad for business.
The EAC has accused the Treasury of not understanding climate change or the risk it posed to global stability and economic prosperity.
Green investment should be a "win-win" solution to economic problems by stimulating growth, rebalancing the economy and reducing pollution, EAC committee chairwoman Joan Walley said.
She said the government's "somewhat schizophrenic" attitude to climate change would undermine confidence that Britain was committed to long-term emissions reductions, damaging green growth.
The 2014 review could weaken the fourth carbon budget, running between 2023 and 2027, if planned emissions reductions are greater than those set by Europe.
The EAC said the fourth carbon budget was already set at the minimum level of ambition, and that lessening the goal would put the legally binding target to cut emissions by 80 per cent by 2050 in jeopardy.
The MPs also attacked the self-styled "greenest government ever" for failing to adopt all the recommendations of the Climate Change Committee, including tightening of the second and third budgets up to 2020.
An EAC report published today warned that the Government's "carbon plan" for cutting emissions needed to be improved.
This follows Chancellor George Osborne telling the Conservative Party conference last week that the UK would cut emissions no faster than others in Europe, and that environmental measures would not be at the expense of British business, which has angered environmentalists.
Ms Walley said: "The long-term carbon-cutting commitments set out in the Climate Change Act are supposed to provide certainty that Britain is determined to reduce emissions by 80 per cent by 2050.
"Unfortunately, the government's somewhat schizophrenic attitude to climate change seems to be undermining that confidence.
"The Chancellor's comments last week show that five years on from the Stern report, the Treasury still doesn't get climate change - or the risk it poses to global stability and economic prosperity.
"While the Prime Minister is to be commended for not faltering when setting the fourth long-term carbon budget, he risks throwing the UK's climate targets off course by instigating a review in just three years' time that could overturn the commitment.
"Backtracking on the government's green promises now would be a big mistake."
Zac Goldsmith, a Conservative member of the EAC, said the one risk all investors highlighted with funding clean technology was changes to policy.
"It is therefore absolutely crucial that policymakers recognise that with the stroke of a pen, they can make a good investment bad.
"Unless they provide real long-term certainty, the transition to a low-carbon economy will be slower and bumpier than it needs to be," he warned.
The report also supports mandatory carbon emissions reporting by businesses and criticises ministers for dropping plans to require Government departments and local authorities to budget for the carbon emissions associated with their policies and operations.