Labor will exempt the electricity sector from its broader emissions trading scheme hoping to limit the hit to the consumer wallet.
Instead, the sector will have its own ETS with an internal carbon market which Labor believes will reduce the impact on power prices.
The opposition's climate change policy - which it will take to the next election - also focuses on a transition away from coal-fired power stations.
Labor wants an orderly, structured phase out of high-polluting energy generators with a support program to transition workers into new industries.
Opposition environment spokesman Mark Butler insists the plan is not a reincarnated carbon tax, while maintaining it's necessary to get Australia's pollution levels under control.
"Labor heard a very clear message from the Australian people about the carbon tax," Mr Butler told reporters in south-west Queensland.
But Environment Minister Greg Hunt said Labor was kidding itself that its ETS was not a carbon tax - which the coalition scrapped upon coming into government.
The policy reaffirms Labor's commitment to 50 per cent of the nation's power coming from renewable sources by 2030 and an emissions reduction target of 45 per cent by the same year.
It focuses on reducing land clearing, while aiming to double energy productivity through measures such as smarter buildings.
The ETS would be implemented in two phases - with the first requiring heavy polluters to offset any emissions above a set cap.
From 2020, an ongoing scheme will be in place - but the details won't be sorted until the next term of government, should Labor be elected.
Opposition Leader Bill Shorten warned of increased insurance premiums, inconsistent food supply and a loss of tourism and jobs if nothing is done to limit climate change.
"Australia is now pretty much the only advanced economy on earth where pollution is rising rather than coming down," Mr Shorten told reporters on Wednesday.
Prime Minister Malcolm Turnbull, who supported the introduction of an emissions trading scheme in 2009 when he was opposition leader, said Labor's plan would raise energy prices.
However, he conceded the coalition's 26-28 per cent target by 2030 would have to rise over coming decades.
The plan has been broadly welcomed by climate groups who believe it could help Australia reach its international obligations under last year's United Nations climate agreement.
In December, 196 parties - including China, India and the United States - agreed to limit global warming to two degrees.
Energy market analysts Reputex modelling shows phasing out coal-fired power stations would have a negligible impact on electricity prices.
However, the peak mining body says the policy puts at risk Australia's export competitiveness by eliminating the "cheapest form" of domestic electricity.
"The inevitable consequences of these policy choices will be higher power prices," Minerals Council of Australia chief executive Brendan Pearson said.
Greens leader Richard Di Natale questioned why Labor's policy was silent on coal exports, accusing all major parties of being beholden to the coal industry.
Labor has also promised to expand the investment mandate of the Clean Energy Finance Corporation, retain the Climate Change Authority and pump an extra $200 million into ARENA.
