The Prime Minister has announced a regional and practical contribution to the Green Fund based on caring for rainforests in South East Asia.

Julie Bishop will follow the announcement with a speech at the UN climate change conference in Lima which is preparing for the Paris UN climate change conference to set carbon emissions targets next year.

Cabinet finalised the decision on Australia’s contribution to the fund — which Mr Abbott has criticised in the past — with the input of Julie Bishop from the climate conference in Lima. The contribution of $200m will be paid over four years, bringing total international contributions to the fund to over the target of USD$10 billion.

The $200 million will be drawn from the existing foreign aid budget.

Mr Abbott defended the government’s “fair and reasonable” change of mind on the fund, which he last year criticised as “a Bob Brown Bank on an international scale”.

“Look, I’ve made various comments some time ago but as we have seen things develop over the last few months, I think it’s now fair and reasonable for the government to make a modest, prudent and proportionate commitment to this climate mitigation fund,” Mr Abbott said.

“I think that is something that a sensible government does. As I have always said, we have been doing a lot to combat climate change … and part of that is being a good international citizen.”

Mr Abbott said money from the fund would be “strictly invested in practical projects in our region” including energy efficiency, better infrastructure, reforestation and carbon offsets.

The contribution to the fund, which is aimed at advanced economies helping developing economies cope with climate change, was set in train at the UN in September climate change meetings called by US President Barack Obama, when the Foreign Minister spoke, and was followed by the rainforest summit in Sydney lead by Greg Hunt.

At the close of the G20 the communiqué from the summit urged leaders to contribute to the Green Finance Fund.

Mr Abbott said Australia would make an announcement at the appropriate time but did not commit specifically to the Green Finance Fund and said there were a number of funds to which Australia could contribute.

Greens leader Christine Milne said the policy backflip demonstrated the “immense international pressure” exerted on Australia at the UN climate talks in Peru.

“There is no way Australia could have continued with its stand against global finance and be viewed as negotiating in good faith here in Lima,” she said.

Senator Milne said the $200 million commitment was too small, given the fund’s aim to reach $100 billion by 2020.

“The Green Climate Fund contribution should be on top of Australia’s overseas aid contributions, not a substitute for it,” she said.

Bill Shorten accused Mr Abbott of a “humiliating retreat” on the Green Climate Fund.

“Tony Abbott’s simply changing his tactics because he’s worried about keeping his job,” the Opposition Leader said.

“He’s not worried about protecting the environment against climate change, Tony Abbott’s worried about protecting his Government against political change.”