But asked if the party's right still had concerns about what Mr Turnbull might do, Dr Jensen said, "absolutely". China's moves to clean up its air are positive for natural gas. Credit:Bloomberg "It's one of the conditions of the leadership change that we are sticking with the policy we had," he told Fairfax Media. "It's also in the [Coalition] agreement with the Nationals, as I understand it. "We fought a very damaging leadership contest on this very climate policy [in 2009], and we will now need to tread with enormous care, put it that way," he said.

Another conservative, who wished to remain anonymous, said: "Turnbull gave two assurances to people who jumped into his camp: no change to marriage plebiscite and no change to Direct Action. Environment Minister Greg Hunt has been a fan of the Yale index. Credit:Andrew Meares "But I fear we will now be softened up in the next couple of months leading into Paris talks with the argument that we didn't want to get ahead but now that the world has acted, we need to do more, and if that happens, things could become very interesting for Turnbull." The warning to the green-inclined new Australian Prime Minister reflects concerns among climate sceptics about Mr Turnbull's longer-term plans for the area. President Barack Obama and Chinese President Xi Jinping at the White House. Credit:Manuel Balce Ceneta

It came as a slew of policy options in tax, education, and other areas ruled out by the Abbott government were placed back on the table, and as China, the world's biggest polluter, prepared to announce a landmark cap and trade scheme to tackle climate change and the country's appalling air quality. Mr Xi was also expected to pledge a "significant financial commitment" to help poorer nations move away from fossil fuels in a joint announcement with his US counterpart, Barack Obama. Mr Xi in the US this week. Credit:Ted S. Warren While Mr Turnbull declined to comment, Mr Hunt was sent out to reassure nervous Liberals that the development out of Beijing would not lead to a similar move from Canberra. "China's on track to be plus-150 per cent on its emissions from 2005 to 2030. We're on track to be minus-26 to minus-28 per cent, so any form of action by any country is welcome, but for us, we're getting the job done, we're doing it without a carbon tax, we're doing it by lowering electricity prices ... and we're reducing emissions in one of the most effective ways in the world," he told Sky News.

He said Australia was doing its part, and while China's move was positive, it was up to each country to work out what was best for it. China and the US – the two largest economies and greenhouse gas polluters – are attempting to lead global action on climate change, and use their international clout to pressure other countries, including Australia, to do more. Under Direct Action, the Australian government is paying companies and farmers to make emissions cuts, while also setting "baselines" for large polluting companies to try to put limits on their emissions. A national Chinese emissions trading scheme would expand on existing pilot projects in seven Chinese cities already up and running. The national market would open in 2017 and would cover industries including power generation and iron, steel and cement makers, according to the White House officials who briefed reporters in Washington.

Chinese officials had previously said the long-awaited nationwide expansion could be ready by the end of next year or early 2017. Despite ideological differences on other matters, including tit-for-tat accusations on cyber-hacking and territorial disputes in the South China Sea, the two presidents have demonstrated the willingness to work together on climate change. In another landmark joint announcement made by Mr Xi and Mr Obama in Beijing last year, both countries set deep emissions reduction targets which have breathed new life into the international climate change debate ahead of talks on a new global climate pact in Paris in December. Cap-and-trade systems typically put a cap on total emissions and then allow factories, power stations and other sources to buy and sell pollution credits. Proponents say the market encourages innovation and lowers the cost of pollution cuts. A proposed US cap-and-trade program failed to achieve congressional support in the US in 2009. Mr Obama has instead established national rules demanding states cut emissions from existing coal-fired power plants. However, California and a collection of north-eastern US states have established their own emissions trading schemes.

The US officials declined to specify how much climate aid China will provide to other countries. Money has been a key demand of developing nations, who say they can't agree to avoid cheaper but more polluting fossil fuels without financing from richer nations. In their joint announcement in December last year, the US promised to cut greenhouse pollution by more than a quarter over the next decade. China pledged by 2020 to reduce by 40 to 45 per cent the amount of carbon produced for every unit of gross domestic product and to reach a peak emission level by 2030. China is the world's biggest emitting nation, accounting for nearly 30 per cent of global greenhouse gas emissions. Australia's Direct Action scheme has been criticised by some observers for lacking teeth and not being able to drive enough cuts to meet the country's international targets to reduce greenhouse gas emissions by 26 to 28 per cent from 2005 levels by 2030.

However, some believe Direct Action could ultimately be turned into a form of emissions trading – called "baseline and credit" – in coming years if there is sufficient political will. The Coalition government has said it will revisit climate policies in 2017-18 as part of an increasing focus on meeting the 2030 goals. Meanwhile, the Labor opposition has committed to introducing an emissions trading scheme as part of its platform for the next federal election. With Tom Arup, Bloomberg Follow us on Twitter