Broad opposition is forming to combat attempts by the Federal Government to introduce a ‘Direct Action’ policy to deal with climate change.

Labor and the Greens have joined forces to kick off a Senate inquiry into the Government’s environmental policy, which is intended to reduce carbon emissions by paying polluters to cut down.

The inquiry is set to find out whether the plan can work, and if it is a more cost-effective way to cut greenhouse gases than alternative ideas such as charging polluters for their actions.

Federal Environment Minister Greg Hunt says the inquiry is a diversionary tactic by the Opposition to continue holding-up the repeal of the carbon tax.

“This is just a diversion from the fact that the Senate has gone on strike and will not consider the repeal of the carbon tax legislation,” Hunt said.

“I don't care what the Senate does, as long as it does its job and addresses the legislation of the day for which the Government was elected, which is the repeal of the carbon tax.”

Greens leader Christine Milne says the inquiry will expose the fact that Direct Action is a meaningless, sham policy.

“It is not a plan, it's basically an idea and that is all,” Milne said.

“Direct Action doesn't exist, it has no shape, it's not an alternative to what we have in place.”

Labor and the Greens have formed a similar alliance against the repeal of the carbon tax; some reports say they are holding out until a substantial replacement policy is defined. Labor had intended to remove the carbon tax it imposed and change to an emissions trading scheme in 2014, there is strong speculation that this is the option the Coalition will now have to float in order to get conformity from the opposition.