Environment Minister Greg Hunt has defended the government’s push to scrap two climate change related bodies alongside the carbon tax after Labor and the Greens moved in the Senate to have repeal bills split to force debate.

Speaking in Melbourne to a carbon industry conference, Mr Hunt said the government’s bill to scrap the independent Climate Change Authority – established to review and advise on emissions targets and caps – was about reducing bureaucracy.

And he said the $10 billion Clean Energy Finance Corporation – which helps fund renewable energy and energy efficiency projects, and is also on the chopping block – was built off borrowed funds and was incredibly speculative.

He said with the 20 per cent renewable energy target in place for the end of the decade the corporation would not add any additional renewable power, but just replace one source with another.

Labor and the Greens used their majority vote last night to split the Abbott government’s package of carbon repeal bills, which included ending the price on carbon but also separate bills to eliminate the $10 billion Clean Energy Finance Corporation and the Climate Change Authority. All up, 11 pieces of legislation were earmarked to go through as one.

During his talk in Melbourne Mr Hunt also revealed a handful of new design details for the Coalition’s $2.55 billion direct action climate policy that would replace the carbon price if repealed. Under the plan $1.55 billion has been committed over four years to pay industry and farmers to make emissions cuts.

"Let us be very clear why this government is choosing to bring these bills forward together as a package," said Labor's Senate leader Penny Wong, according to Hansard. "It is because they want to limit debate, limit scrutiny, limit consideration."

"It is a blind, narrow, ideological approach to this issue which we have from those opposite," Senator Wong told the upper house.

The Senate will now debate scrapping the CEFC and the authority in separate repeal bills, starting with the CEFC later today.

Mr Hunt – who will release a green paper on direct action this month – said there was an expectation those wanting to sell emissions cuts to the government would be offered five-year contracts.

The projects could also create ‘‘credits’’ that extend beyond five years, and would be able to be converted into international offsets.

Opposition climate change spokesman Mark Butler said Labor remained committed to an emission trading scheme as the most effective and cheapest way to reduce emissions.

He pointed to widespread support for emissions trading schemes around the world, including in China where three regional schemes have started in recent weeks.

Mr Butler said a trading scheme was superior because it included a legislated cap on greenhouse gas emissions that reduced over time, ensuring emissions would be cut and targets would be met. He described direct action as ‘‘little more than a dressed-up slush fund’’.

'Breathtaking'

Eric Abetz, the government's leader in the Senate, described the split as "breathtaking in its political stupidity".

Both Labor and the Greens said the government had pushed through the carbon repeal package using its dominance in the House of Representatives with little debate, particularly beyond the carbon price itself.

The CEFC has argued that it is run at arms’ length from political influence and will deliver a profit for the government of as much as $200 million a year through financing renewable energy, energy savings, and low-carbon technologies. While in opposition, the Coalition dubbed the CEFC a “giant green hedge fund” and “Bob Brown’s Bank”.

Senator Abetz repeated Joe Hockey's explanation in the lower house why the CEFC should be scrapped: "Very simply, setting up a government bank with $10 billion - that is 10 thousand million dollars of borrowed money, underwritten by taxpayers—to invest in high-risk ventures should be a thing of the past in this country."

The Climate Change Authority is headed by former Reserve Bank Governor Bernie Fraser. Among its roles is advising the government on setting targets to reduce carbon emissions.

At the end of October, the authority released its draft report on emissions, recommending the government aim for 15-25 per cent cuts on 2000 levels by 2020 rather than the 5 per cent it is now committed to.

"[I]f you remove the carbon tax there is no real need for this authority, the principal role of which is to provide advice concerning the ongoing operation of the carbon tax," Senator Abetz told the Senate.

Greens leader Senator Christine Milne described the decision by the Abbott government to scrap the CEFC was "vain and ideological".

"I think the reason we need to split these bills up is for the Coalition to be able to stand up and explain to people in depth what is wrong with the Clean Energy Finance Corporation, because there was no evidence given to the committee to support the abolition," Senator Milne told the Senate. "In fact, all the evidence from the investors, the NGOs and the whole business community was to recognise what a fantastic job the Clean Energy Finance Corporation have done."

"I do not think the Australian people know that encompassed in the slogan, 'Axe the tax,' is getting rid of the Clean Energy Finance Corporation and renewable energy investment or getting rid of the only institution which is giving independent advice on the appropriate level of effort from Australia on behalf of future generations," Senator Milne said.

Number crunch

The parliamentary tactics of Labor and the Greens may postpone the demise of the carbon price, the CEFC and the authority but the delay may only extend until July 1 when the new Senate takes over.

With the slew of new micro party members and Clive Palmer's Palmer United Party, though, the Abbott government still has some wooing to do to secure enough numbers to pass the carbon repeal bills as a package or in parts.

Senate John Madigan indicated last night in the Senate that his vote, for one, could not be counted on.

The Victorian Democratic Labor Party senator said he opposed efforts to "guillotine" legislation, and that he is opposed to the scrapping of the CEFC.

"I certainly support most of the government's position regarding the carbon tax but I will save that for the coming debate," Senator Madigan said. "However, I do not support the abolition of the Clean Energy Finance Corporation."

South Australian senator Nick Xenophon last week indicated his support for the CEFC as well. If both senators Madigan and Xenophon voted to block elements of the carbon package, Labor and the Greens may need only two more votes to stymie the Abbott government's plans - assuming the two larger parties vote as one of the package.

Alternatively, the Palmer United Party combining with the Greens, Labor and two independents or micro party senators would be sufficient to block the repeal bills.

Political horse-trading would also be affected if WA holds a byelection to resolve disputes over the state's senators. A recount saw Greens senator Scott Ludlam retain his seat and the Australian Sports Party's Wayne Dropulich win election, but legal challenges may force another election.