"Direct Action is little more than a slogan designed to hide the government's global warming denialism," Greens Leader Christine Milne said.
"The Senate inquiry will expose Direct Action as a ploy to distract Australians from the government's refusal to take the advice of experts.
"Global warming is hurting us now and Direct Action will do nothing to change that. In fact, the inaction it represents will make things worse.
"Despite overwhelming evidence that putting a price on pollution is the most effective and affordable way to reduce emissions, the Prime Minister is doggedly continuing his vendetta to try and tear down our clean energy laws - proposing his half-baked Direct Action sham to fill its place.
"If the government wants to tear down our only legislated, tried and tested mechanism to reduce greenhouse pollution then the Australian public deserve to know the details of its replacement.
"As it stands, PM Abbott's Direct Action sham is not supported by economists or climate scientists. This inquiry will bring what little information exists about the plan into the open.
"As we reflect on the tragedy of the recent global warming fuelled extreme weather and the likelihood that we will be facing longer and more severe fire seasons; there is a greater onus than ever for the Abbott government to justify watering down and weakening our climate protection laws."
The terms of reference for the inquiry are as follows:
(a) the following matter be referred to the Environment and Communications References Committee for inquiry and report by 24 March 2014: An inquiry into the Abbott Government's Direct Action Plan and the Abbott Government's failure to systematically address climate change, including:
(i) whether the Direct Action Plan has the capacity to deliver greenhouse gas emissions reductions consistent with Australia's fair share of the estimated global emissions budget that would constrain global warming to Australia's agreed goal of less than 2 degrees,
(ii) whether the Direct Action Plan has the capacity to reduce greenhouse gas emissions adequately and cost effectively,
(iii) the effect of technical issues that arise for measuring abatement under the Direct Action Plan, including additionality and establishing emissions baselines for emitting entities and long-term monitoring and reporting arrangements,
(iv) the impact of the absence of policy certainty derived from the Direct Action Plan to encourage long-term business investment in the clean, low carbon economy,
(v) the impact of the abolition of the Clean Energy Finance Corporation on the availability of capital for clean technology and industry investment,
(vi) the repeal of the Clean Energy Package and the Direct Action Plan's impact on, and interaction with, the Carbon Farming Initiative,
(vii) the fiscal and economic impact of the Direct Action Plan,
(viii) the impact of repealing the Clean Energy Package on Australia's ability to systemically address climate change,
(ix) the impact of repealing the Clean Energy Package on Australia's carbon pollution cap,
(x) the impact of repealing the Clean Energy Package on international efforts to reduce carbon pollution,
(xi) the impact of abandoning linkage with the European Union on international cooperation to reduce emissions,
(xii) the ability of the Government and the Australian people to receive expert independent advice on an appropriate carbon pollution cap for Australia following the abolition of the Climate Change Authority,
(xiii) the impact of cuts to funding for the Australian Renewable Energy Agency, and
(xiv) any other related matters; and
(b) in undertaking this inquiry the committee must have regard to the Climate Change Authority's draft report, Reducing Australia's Greenhouse Gas Emissions - Targets and Progress Review, dated October 2013.