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Burke said it was entirely possible some projects would end up, perversely, funding emissions increases.
However, campaigners suggested the new pledge was undermined by its reliance on the industry funding emissions cuts elsewhere.
The idea is that rich countries that find it costly to cut their emissions can instead offset them by funding emissions reduction projects, such as wind farms or solar panels, in poorer nations.
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The revenue will often be used by the business to fund emissions reduction measures such as purchasing renewable energy or boosting energy efficiency.
The Coalition's Direct Action climate policy has set aside $2.55bn to fund emissions reduction from businesses that wish to do so, although much of the reduction will depend on how the government treats firms that do not apply for the grants and maintain, or increase, their emissions.
Carbon credits from the CDM allow Northern polluters who are obliged to reduce their emissions under the Kyoto Protocol to keep polluting if they fund emission reductions in the global South.
The Coalition climate policy is dangerous, because it creates the impression that unproven soil carbon storage and $3bn in funding of emissions reduction projects could possibly reduce Australia's carbon emissions by any amount, let alone by 5%.
Contractors would receive payments from the fund once emissions were reduced.
According to the World Bank's Carbon Fund, if emissions from forest degradation are more than 10% of all forest-related emissions, they must be included and accounted for.
After Scott Morrison took the leadership, he dumped Turnbull's energy policy, and proposed a $2bn "climate solutions fund" to reduce emissions, with funding to be rolled out over 15 years.
The National Audit Office, reporting on renewable energies last week, said wind was the most expensive way to fund carbon emission reductions in Britain.
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