The 2017 review of climate change policies, released this morning, says the government will keep its centrepiece policy the Emissions Reduction Fund – which needs extra funding.

It will also adjust the safeguard mechanism that sets baseline emission levels for big polluters, and consider allowing the purchase of international carbon credits.

A new “review and refine” cycle will allow governments to tweak policies in line with the five-yearly updates to reduction targets under the Paris Agreement.

Many stakeholders told reviewers a longer-term climate policy was vital to support investment decisions.

Chief Scientist Alan Finkel, reviewing the electricity sector, also told the government it should develop a whole-of-economy strategy to cut emissions up to 2050.

But the government believes its sector-by-sector approach remains the best strategy.

However, it has committed to developing a longer-term, non-prescriptive strategy by 2020 that will look at opportunities to cut the carbon footprint across each economic sector.

The emissions reduction fund, which started out with $2.5 billion, only has $265 million left in its coffers and will have to be topped up in future budgets if the government wants it to continue as the centrepiece.

It has so far contracted more than 190 million tonnes of abatement – about two-thirds through revegetation projects – at a lower than predicted average cost of $11.90 per tonne.

The in-principle support for Australians to buy offsets from international markets is a significant step forward.

Environment Minister Josh Frydenberg says the thinking is to seek the lowest cost abatement available.

“When it comes to helping the environment, it doesn’t matter whether you’ve reduced a tonne of CO2 here in Australia or in another country,” he told Sky News.

The government will wait to see the full Paris Agreement rules, expected to be ready at the end of 2018, before making a final decision on the use of international credits.

Depending on those rules, it may also consider allowing Australian units to be sold overseas, although the review notes this could push up the cost of domestic abatement.

The review says the rapid pace of technological change makes it hard to predict what Australia’s economy and future emissions will look like and therefore what level of reduction is needed.

But the latest greenhouse gas inventory data, also released today, shows the nation’s emissions rose 0.7 per cent in the year to the end of June.

This year’s projected emissions trend to 2030 is lower than calculated in 2016.

But emissions are still expected to rise slightly over that time instead of the sharp fall needed to meet Australia’s Paris Agreement target of 26-28 per cents on 2005 levels.

The Australian Conservation Foundation said the Government had “done nothing more than kick the can down the road while Australia’s climate pollution continues to soar”.

ACF chief executive Kelly O’Shanassy said the Turnbull Government did not take the threat of climate change seriously.

“All this review does is put off the real work until 2020,” she said.

“In the meantime the Turnbull Government has looked to scrap, weaken and defund tools proven to be effective in tackling climate change like the national renewable energy target, Australian Renewable Energy Agency and the Clean Energy Finance Corporation, while persisting with its failed Direct Action policy and leaving the heavy lifting to state governments.”

– AAP