Treasury secretary Martin Parkinson has told an audience in Washington it appeared inevitable that Australia would have to resettle climate change refugees in the coming decades.

Dr Parkinson had just given a speech about international economic co-operation at the Centre for Strategic and International Studies when an audience member from Fiji asked a question that deftly linked two of the Australian government's most sensitive issues - climate change and refugee policy. He wanted to know what role Australia would play in resettling people from the region faced with the impact of climate change.

Dr Parkinson, whose relationship with the government has already been fractured over the issue of climate change, did not duck the question on Thursday evening.

''[It] doesn't necessarily arise because you wake up one morning and find water around your ankles because the sea level has risen,'' he said. ''We are seeing it already in some of the small island countries where you are seeing potable water degradation in fresh water wells. If climate change plays out the way scientists believe, then it will be inevitable that there will be climate change refugees in our region and it would naturally fall to Australia and New Zealand to welcome any of those because of our historic links with those countries.''

He said Australia already assists countries in the region adapt to the changing climate and to cope with natural disasters such as cyclones.

It is understood that Dr Parkinson has been ousted as Treasury secretary by the Abbott government because of his association with climate change policy.

He was due to depart in June but this month it was revealed that Mr Abbott had asked him to stay on until the end of the year to help with Australia's presidency of the G20.