The Abbott government has rejected a call by its own independent advisers to impose extra scrutiny on polluters to ensure billions of taxpayer dollars are not spent on emissions cuts that would have occurred anyway.

The refusal, which comes as the government prepares to announce post-2020 emission reduction targets, casts doubt on Australia's centrepiece climate change policy and raises fears that taxpayers are subsidising otherwise profitable private projects.

The Climate Institute's John Connor: "The highest level of scrutiny should be [applied] when we are using taxpayer funds.''

The Climate Change Authority is an independent agency that advises the government on carbon mitigation policies. The government sought to abolish the authority last year but was blocked in the Senate.

In December, a report by the authority examined the Emissions Reduction Fund, which spearheads the government's "direct action" plan to reduce Australia's greenhouse gas emissions and meet global carbon reduction commitments.