The Australian government is launching a major new initiative aimed at preventing global warming.
The Howard government has not signed the Kyoto protocol
Prime Minister John Howard announced an investment of A$500m (US$379m) in clean technology, much of which will look at reducing carbon emissions from coal.
Australia, one of the world's biggest exporters in coal, has not signed the 1997 Kyoto agreement saying it would damage its domestic economy.
But the country has been facing its worst drought in a century.
Mr Howard has dismissed claims that the drought is the product of long-term climate change.
But water shortages have become a political issue, with the dry conditions destroying the livelihoods of thousands of farmers.
In his weekly radio address, Mr Howard said Australia would invest in new technologies to cut down emissions from fossil fuel power plants. Some of it would also go towards renewable energy systems.
Parts of Australia are suffering a severe drought
"We're all affected in some way by climate change," he said.
"We must respond on a number of fronts. There is no one single solution that will reduce greenhouse gas emissions over the years ahead."
But an Australian environmentalist said the government had "set its course on a technological fix" to deal with climate change and had overlooked the country's renewable energy resources.
"We have great wind, solar, bio energy, geothermal potential. We could be exploiting these options and be a real leader in the renewable energy industry," Monica Richter of the Australian Conservation Foundation told the BBC World Today.