Labor will scrap the Abbott government's central tool for cutting greenhouse gas emissions and focus on renewable energy if it wins power, Opposition Leader Bill Shorten is expected to say on Friday.
In an address at the University of NSW, Mr Shorten is expected to pledge to abolish the Emissions Reduction Fund, which uses public money to pay companies to reduce their pollution.
The fund spearheads the government's Direct Action plan, which replaced Labor's so-called "carbon tax".
Critics say the fund will not achieve the emissions cuts needed and taxpayers are subsidising polluters to carry out projects, such as improving energy efficiency, that they would have pursued in any case.
"We will not continue to subsidise windfalls for companies that are already acting," Mr Shorten's speech notes say.
"Yes, we will honour contracts that the government has entered into, but the largesse ends there."
The UNSW event is organised by the Chifley Research Centre, Labor's official think tank.
The government has committed $2.55 billion to the fund so far and this week pledged another $2.4 billion in the 12 years to 2030.
Projects signed up to the Emissions Reduction Fund in April promised to save 47 million tonnes of carbon dioxide and equivalent gasses at a cost of $660 million.
Mr Shorten will say that based on uncommitted and future funding, "abolishing this program today represents a saving of up to $4.3 billion".
It is understood Labor intends to spend the money on other priorities, such as budget repair and renewable energy, which Mr Shorten will on Friday describe as a "better, cheaper, faster and more efficient way for Australia to tackle climate change".
Labor has set a goal that by 2030 half Australia's energy should come from renewable sources. The government says the policy is "reckless", citing analysis that says it would cost about $85 billion.
Labor also intends to introduce an emissions trading scheme. The government says that amounts to a new carbon tax and will drive up power prices
The government this week announced the post-2020 emissions cuts it will take to Paris climate talks later this year: 26 to 28 per cent by 2030, based on 2005 levels.
The targets, described by critics as "weak", raised questions over how the cuts would be made and how much they would cost.
The Australian Industry Group says if the government relies solely on the Emissions Reduction Fund to achieve the cuts, it will cost up to $250 billion in nominal terms in the decade to 2030.
On Thursday Environment Minister Greg Hunt said those figures were "plainly ridiculous, unacceptable and wrong".
He has previously said the fund is among a suite of tools to cut emissions, pointing to other proposed measures such as a national energy productivity plan, which would improve energy and vehicle efficiency.
However, those measures are still in their infancy and the cost to taxpayers is unknown.
This month the government rejected calls by its own agency the Climate Change Authority to impose extra scrutiny on the Emissions Reduction Fund to ensure billions of taxpayer dollars are not spent on emissions cuts that would have occurred anyway.
