The Abbott government’s changes to existing climate change policies would cost the budget as much as $40 billion by 2020, according to the Climate Institute, and the cost will blow out even further if it weakens the renewable energy target.

The estimated costs stem in part from payments to polluters to curb greenhouse gas emissions under the government's Direct Action emissions reduction plan. This tally includes the $2.55 billion for the first four years of the Emissions Reduction Fund and an estimated $1.2 billion annually after that.

The Abbott government should rethink its approach to carbon abatement to save the budget bottom line, says the Climate Institute. Credit:Graham Tidy

"This is a friendless piece of policy and not many people are standing up to defend it," said John Connor, chief executive of the Climate Institute.

A bigger blow to the budget, though, will come from the loss of the carbon tax revenues if, as expected, the new Senate votes to repeal it after July 1. Current laws indicate the price – now a tax but due to convert to a floating price by mid-2016 at the latest – will bring in more than $18 billion.