Prime Minister Scott Morrison says he will consider options if they make financial sense, after a major climate report released on Monday urged drastic changes across the globe to prevent temperatures rising by 2degC.
"I am not going to rule out things based on ideology," he told reporters in Sydney on Tuesday.
"I am going to consider things that I think will ensure that we get electricity prices down when it comes to energy.
"I will also always consider things that will help us meet our environmental targets."
The United Nations climate report analysed 6000 scientific studies and calls for coal to be phased out by 2050, increased wind and solar power and more investment in sustainable agriculture and carbon capture technology.
UN Secretary-General Antonio Guterres says it is an "ear-splitting wake-up call to the world".
The effect of a changing climate can be seen through more extreme weather, rising sea levels and diminishing Arctic sea ice, he said.
However Environment Minister Melissa Price said phasing coal out by 2050 is an irresponsible target and scientists are "drawing a very long bow".
"I just don't know how you could say by 2050 that you're not going to have technology that's going to enable good, clean technology when it comes to coal," she told ABC radio on Tuesday.
Established energy policies include the Clean Energy Fund, the Renewable Energy Target, the Emissions Reduction Fund, the Snowy Hydro 2.0 project and a forestry plan to plant one billion trees.
The RET will not be renewed or replaced when it lapses in 2020 and $US250 million ($NZ274 million) remains in the ERF of its initial $A2.5 billion.
Greenhouse gas emissions have climbed 1.3% to their highest quarterly levels in eight years, the latest data reveals, something Ms Price says has been largely driven by increased volumes of LNG production.
"The most important thing in that report is that electricity emissions have declined by 13.9 percent in the year to March 2018," she said.
While not committing to phasing out coal by 2050, Labor's policy is to reduce emissions by 45% and for 50% of the energy mix to be from renewables by 2030.
Labor climate spokesman Mark Butler says demand for Australia's coal will gradually decline as countries like China and India begin to phase out coal-fired power plants.
His Labor colleague Anthony Albanese says science, a transition plan for affected workers and job opportunities in the renewable sector should be central to policy.
Executive director of the Australia Institute Ben Oquist says all sectors will have to do more for Australia to reach its Paris targets, particularly agriculture.
