The Federal Government now has a deadline of early 2015 to set a target for reducing carbon emissions after nearly 200 countries reached a deal at the end of international climate talks in Warsaw.

But a peak industry body says a central part of the Government's climate change policy will not always work.

The Warsaw meeting ended with an agreement on a timetable for nations to name their emissions cuts before another meeting in Paris in December 2015.

The Paris meeting aims to produce an international agreement to replace the Kyoto Protocol that will come into place in 2020.

The Government is proposing to pay polluters to reduce emissions under its $1.5 billion Emissions Reduction Fund, which it wants up and running in July.

In its submission on the scheme, industry lobby group Australian Industry Group says companies are not always going to be able to deliver as planned.

While the Government wants the fund to target domestic emissions, Ai Group is urging it also to include international carbon emissions.

Chief executive Innes Willox says the Government should spend a portion of the allocated budget on the reserve of international carbon credits.

"We need to get our emission reductions done at least cost," he said.

"This is one way of doing it. This is also a fallback in case the emissions reduction fund, for whatever reason, doesn't deliver on the outcomes that it seeks."

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A reverse auction would be at the centre of the fund, involving companies and landholders competing against each other for funding to reduce emissions.

Mr Willox says such a scheme carries risks.

"Some winners in auctions aren't going to be able to deliver what is promised because changed market conditions or the like between the purchase of abatement and project delivery," he said.

"There are a lot of variables at play here, so that's why ... the purchase of international abatement is a very prudent fallback for the Government to consider."

Australia's current target is to reduce emissions by 5 per cent by 2020 and the Climate Change Authority is recommending that it be at least 15 per cent.

Ai Group says its proposal is a "prudent fallback" in case that target cannot be reached or if the Government wants to go further than 5 per cent."

Mr Willox also says the timeline is short for such an ambitious policy and does not provide enough opportunity for careful consideration of key parameters.

Several groups, including Ai Group failed to meet the November 18 deadline for first submissions.

"This a very tight time frame that we're working to," Mr Willox said.

"There's a clear consultation process that the Government's put in place that we welcome, but it will be tight."

Federal Environment Minister Greg Hunt was unavailable for interview.