A $200 million government backflip on an international green climate fund will come at the expense of Australia's foreign aid budget.
In a bittersweet victory for green groups, Foreign Minister Julie Bishop on Wednesday announced to a UN climate change conference in Lima that Australia would now contribute to a $10 billion fund that aims to help developing nations tackle global warming.
The decision is a reversal of its stance at the G20 summit in November.
But the $200 million pledge will come from an already-plundered foreign aid budget.
The Australian Greens said the pledge was "robbing Peter to pay Paul", wasn't enough and came too late.
The Climate Institute said Australia's contribution was about $350 million short of fair.
Ms Bishop defended the contribution, saying Australia had provided about $600 million in the past three years to the UN's Fast Start Finance initiative.
That equated to almost two per cent of the program, even though Australia was responsible for only 1.3 per cent of global emissions.
Finance is a sticking point at the Lima talks, with developing nations reluctant to move on climate action before more advanced nations.
Two dozen countries have contributed to the global fund, which has now broken the $10 billion ceiling agreed to in 2009.
Prime Minister Tony Abbott has previously labelled the fund an international "Bob Brown bank" - after the former Greens leader - and said it would be impossible for his government to support it.
But in an about-face on Wednesday, he said it was fair and reasonable to pledge a contribution.
"We've seen things develop over the last few months," he told reporters in Melbourne.
The prime minister said Australia's prudent and proportionate commitment would go to emission reduction projects in the region.
Opposition Leader Bill Shorten said the rest of the world had shamed Mr Abbott into a humiliating retreat.
"Does anyone think that Tony Abbott is putting $200 million into the environment or his own job?" he said.
But former US secretary of energy Steven Chu believes world leaders should be looking mainly to the private sector, not taxpayers, to fund renewable projects around the world.
"Most of the investment that can be done, can actually be done in the private sector that makes money," he told the National Press Club in Canberra.
WHAT IS THE GREEN CLIMATE FUND?
* $10 billion fund aimed at helping poorer nations curb emissions.
* 24 countries have committed funds.
* United States has contributed $3 billion, Japan $1.5 billion.
* Germany, France, Sweden have contributed more than $500 million.
* Switzerland, South Korea, Canada, Spain have pledged smaller contributions.
* Australia has pledged $200 million.
