Direct Action is a "Mickey Mouse" scheme that falls short of the "real leadership" needed to tackle climate change, a former adviser to John Howard says.

The president of the Australian Conservation Foundation, Geoff Cousins, has slammed the Abbott government's Direct Action policy, which was approved by the Senate last week, following a surprise deal between the Coalition and the Palmer United Party.

Criticised Abbott government scheme: Geoff Cousins. Credit:Darrian Traynor

The program will set up a $2.55 billion Emissions Reduction Fund, designed to help Australia meet its emissions reduction target of 5 per cent below 2000 levels by 2020. Through the fund, the government will provide incentives to businesses, households and landowners to reduce their emissions.

Mr Cousins told ABC TV on Sunday that politicians "of all stripes" were failing Australians in the area of climate change policy.