AFTER previously refusing to contribute to the global Green Climate Fund, Prime Minister Tony Abbott on Wednesday backed down and pledged $200 million.
But the funding, which will come from the dwindling coffers of Foreign Minister Julie Bishop's aid budget, has been widely criticised.
Mr Abbott, who is in Canberra, and Ms Bishop who is at a United Nations climate finance meeting in Lima, released a joint statement on the contribution.
The funds would be paid in $50 million contributions each year for four years, and Mr Abbott described it as a "prudent and fair" contribution.
He said the pledge would be directed to help private sector-led economic growth in developing nations in the Indo-Pacific, with investment in energy, forestry and "emissions reductions programs".
But Labor's foreign affairs spokeswoman Senator Penny Wong hit out at the grant, saying it had come too late to repair Australia's reputation as a "laggard" on climate change.
The grant announcement follows Ms Bishop saying the Great Barrier Reef should not be listed as a World Heritage site "in danger", despite numerous concerns about the lack of government action to halt the reef's decline.
The Climate Institute chief executive John Connor said the $200 million contribution to the green fund was welcomed, but "modest" and fell short of the Institute's belief that $350 million each year was the "minimum fair contribution".
Mr Connor and other environmental groups also urged the government not to fund the contribution from the foreign aid program, which has already suffered billions of dollars in budget cuts.
Mr Abbott's announcement also came with a confirmation the government planned to delay revealing its post-2020 emissions reductions targets until mid-2015.
China, the United States and the European Union have pledged to release their targets in the first quarter, ahead of Paris talks on the future global target.
Ms Bishop said Australia was "deeply engaged" on global action on climate change, despite recent reports Mr Abbott tried to cancel her trip to the Lima conference.