Christine Milne has said the Greens will help put “spine and rigour” into the Coalition’s Direct Action climate plan and allow it to become law, in return for an assurance that the renewable energy target will not be wound back.

Milne called Direct Action a “pathetic ill-defined excuse for climate action” but said the Greens would negotiate with the government to improve it on condition the RET remained unchanged.

The Greens leader said the government had put jobs at risk by repealing carbon pricing, warning that further jobs and investment would be lost if the RET was scaled back or closed entirely.

“The only way those jobs and ongoing climate emissions reductions can be rescued is for the government to negotiate on putting some spine or rigour into Direct Action,” Milne said in a speech to the National Press Club.

“Consistent with our view that all tools in the toolbox must be used to genuinely reduce emissions, the Greens are prepared to negotiate with the government to knock Direct Action into shape, but only if it is not separated from the RET.”

Direct Action has yet to be legislated by the government, so Australia has no primary policy to reduce carbon emissions.

Labor, the Greens and the Palmer United party have all stated their opposition to the plan, calling it ineffective or a waste of money.

The $2.5bn policy would provide grants to businesses that wish to voluntarily lower their emissions. There would be no cap on carbon pollution, and safeguards to ensure emissions do not rise elsewhere in the economy have yet to be worked out.

The government has insisted that Direct Action will meet its target of a 5% reduction in emissions by 2020, based on 2000 levels. However, no official modelling has been done on this and independent analysis has found the policy would be insufficient to meet the target.

Milne would not specify exactly how Direct Action could be improved to the satisfaction of the Greens, saying: “It’s such a bad policy that it’s an open book. There’s a long way to go on many, many issues, so there’s a lot to flesh out.”

She did, however, reject the idea that the policy’s proposed emissions reduction fund could be used to pay heavily polluting power stations to close. The fund will be administered by altering the carbon farming initiative.

The government estimates there is about nine power stations’ worth of excess capacity in Australia’s power grid but has said funding will be used to “clean up” power stations rather than shut them.

“When former minister Greg Combet went to negotiate cash for closure with the coal stations they had the sniff of victory in their nostrils with an Abbott government coming and they decided to bank the money they got and wait to be able to pollute for free,” Milne said.

“So they have blown their chance, in my view. It’s time to do what the United States has done, which is to regulate their emissions or come up with some other plan. But there is an opportunity now to phase them out.”

Milne said the Greens would not accept any change, however minor, to the RET in its negotiations over Direct Action.

The Coalition has called on Labor to come to an agreement over the RET, which requires that 41,000 gigawatt hours of Australia’s energy comes from renewable sources by 2020. A recent review recommended either a suspension of or end to new investment into the RET scheme, and a leading union has pushed for the aluminum industry to be exempt.

A spokesman for Greg Hunt, the environment minister, said: “We welcome discussions with all crossbenchers to pass the carbon farming initiative amendment.

“The government has received the RET review report and will announce its position in due course.”

In her speech, Milne accused the government of “climate denialism and irresponsibility”, saying that it would be better if Australia did not send a representative to coming climate talks in New York and Lima if the government continued “obstructing progress and dissuading its trading partners to take tough action on climate”.