Prime Minister Tony Abbott has assured Christine Lagarde that Australia will meet its CO2 reduction targets, after the International Monetary Fund head renewed calls for greater action on climate change.
Ms Lagarde is in Sydney ahead of the G20 finance ministers meeting this weekend, and used the opportunity to stress that one way or another, climate change must be dealt with.
"I was really pleased to see that the government is maintaining its objective and clearly we will be interested in seeing what the proposals are," she said.
Mr Abbott on Friday said he'd been "lucky enough" to speak with Ms Lagarde during her trip about a range of issues, including action on climate change.
"I was able to assure her that we are confident here in Australia of meeting our five per cent emission reduction targets by 2020," he told reporters in Canberra.
"But we're going to do it through incentives, not penalties."
The coalition government is trying to scrap Labor's carbon tax and replace it with a direct action plan on climate change, which is still being finalised.
The five per cent target is the unconditional goal agreed to by both parties, but environment groups and the independent Climate Change Authority have warned deeper cuts will be necessary in the future.
Ms Lagarde has previously championed Australia's pioneering role in working to combat climate change and said on Thursday she "certainly hopes" that doesn't change.
