Billions earmarked in the budget to encourage businesses to go green marks a shift in the way Australia plans to tackle climate change and meet its pollution targets.
The federal government will allocate $2.55 billion in the budget for its emissions reduction fund, which offers financial incentives to companies that devise ways to reduce their carbon footprint.
The government is confident that funding these green initiatives - such as cleaning up power stations or revegetating degraded land - will result in Australia meeting its five per cent emissions reduction target by 2020.
This approach differs significantly to Labor's carbon pricing scheme, which aimed to reduce the nation's greenhouse gas output by penalising big emitters that exceed a limit on pollution.
Unlike carbon pricing, the emissions reduction fund is unlikely to raise any revenue and it also relies on businesses volunteering to take part.
The government believes its scheme is a cheaper way to meet its five per cent target than carbon pricing, but there's uncertainty about how much it will need to spend to achieve this goal.
The $2.55 billion is just the start-up cash for the first four years of the scheme, with the remaining funding out to 2020 still a mystery.
Those final years will be revealed in the budget, but there's uncertainty over whether the government can purchase enough carbon abatement with the money available in the fund.
Environment Minister Greg Hunt has made it clear the fund is capped, and not a dollar will be spent unless CO2 emissions are actually reduced.
The government is also accepting it will forgo billions in potential revenue by repealing the carbon price.
But it's determined to have its emissions reduction fund up and running in the second half of this year, even if the Senate opposes it.
The $2.55 billion for the fund is linked to the budget papers, so short of the upper house triggering a constitutional crisis by blocking supply, it's likely to get the go ahead.
Elsewhere in the budget, there's concerns that funding for climate finance - or money given to poorer countries to help mitigate climate change - will be reduced or cut altogether.
Australia provided nearly $600 million between 2010 and 2013 in climate finance to developing countries.
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