The Prime Minister has sought to reassure Australians he understands community concerns about bushfires and smoke haze as the Federal Government faces criticism for its climate policies.

Key points: Scott Morrison says he understands community concerns about smoke haze engulfing cities

Scott Morrison says he understands community concerns about smoke haze engulfing cities But the Prime Minister insists his government won't be changing its climate policies

But the Prime Minister insists his government won't be changing its climate policies An international climate conference has featured criticism of Australia's emissions targets

Scott Morrison acknowledged that climate change was a factor contributing to increasingly intense bushfire seasons.

But he ruled out strengthening Australia's emissions reduction target, despite New South Wales Government plans to take greater action.

"I know, because I'm a Sydneysider, how unusual it is to see that haze across my city, and I know how distressing that would be, particularly for young people who haven't seen that before," Mr Morrison said.

"So that is why I think it is important to have a sense of calm on these matters on the basis of information."

Smoke haze has blanketed Sydney, hitting hazardous levels as bushfires continue to blaze across the state.

Canberra has also been engulfed by smoke, with people urged to stay indoors.

Blazes have destroyed hundreds of homes in the eastern states this spring and summer.

There has been growing pressure on the Federal Government over its climate policies. It follows NSW Liberal Environment Minister Matt Kean linking the bushfires and climate change.

Climate activist Greta Thunberg inspired the largest climate demonstration in human history. ( Time via AP )

While some in the Federal Government had called for the debate about climate change and fires to occur outside of bushfire season, Mr Kean argued that now was the time for that debate.

The Australian Government's climate and emissions policies have also faced criticism at international talks in Spain.

"We will continue to work to reduce our emissions, as we should," Mr Morrison said.

"But what we cannot say, what no-one can say, is those programs, of themselves, are in any way directly linked to any fire event."

Climate activist Greta Thunberg, speaking in Madrid, took aim at business and political leaders for misleading the public by holding climate talks that were not achieving real action against what she called the world's "climate emergency".

The conference is debating the role "carry-over credits" can play in the nation's efforts to meet commitments under the Paris climate agreement.

Carry-over credits are claimed by nations, including Australia, that came in under earlier emissions targets.

Opposition Leader Anthony Albanese said the practice of using carry-over credits should be banned.

While touring Queensland to try to shore up support among regional voters, he said Labor would decide on its climate policies closer to the election.

But he reiterated a Labor government wouldn't use carry-over credits to meet its emissions reduction target.

Mr Albanese said it was "embarrassing" Australia would use carry-over credits to get around taking stronger action to reduce emissions.

"This Government needs to act now," the Opposition Leader said.

"It doesn't have a plan to deal with its existing plan."