Australian Prime Minister Julia Gillard Saturday pledged 400 million dollars (360 million US) to take old cars off the road and vowed to impose tougher fuel standards as part of her election policy on climate change.

Gillard, who is seeking a second term for the ruling centre-left Labor party, said she would offer a 2,000 dollar rebate for people to trade in a car built before 1995 for greener hybrid models.

"Australians own a lot of old motor cars, and those old cars guzzle a lot of petrol and they spew out a lot of pollution," she said, campaigning in the country's north. "I want to help Australians update their motor vehicles."

The scrapping and recycling of 200,000 cars under the policy would save one million tonnes of carbon, she said. There were up to two million such high-polluting cars on Australian roads.

Gillard said, if elected on August 21, she would also impose mandatory carbon emissions standards on new cars weighing 3.5 tonnes or less from 2015, saving up to 2.6 million tonnes of carbon dioxide every year.

"When we look at climate change and our nation's carbon footprint, light vehicles contribute about 10 percent of that carbon footprint," she said.

"So the practical measures we can take to make a difference to the kind of vehicles people drive, how they travel, make a real difference," she said.

The pledges come after Gillard's keenly-awaited climate policy launch received a tepid response on Friday, with some rubbishing her "citizen's assembly" to guide action on global warming as a waste of time.

Australia is the world's biggest per capita polluter and Labor came to power in a landslide 2007 election fought on a pro-green platform.

Former prime minister Kevin Rudd ratified the Kyoto Protocol as one of his first acts in office, and he took a lead role in last year's failed global climate talks in Copenhagen.

But Rudd's popularity began to slump after he shelved an emissions trading scheme which was twice defeated by conservative lawmakers in the upper house, and he was ousted in a party coup which installed Gillard in his place.

In a speech marred by protests, Gillard Friday said she remained committed to a "market-based" solution to pollution as the country bids to cut emissions by five percent from 2000 levels by 2020. Businesses would be given incentives to act immediately on pollution and Australia would make use of renewable energy.

But Gillard warned that she would only act "in step" with major economies and would be guided by the "assembly" -- a group of 150 ordinary Australians -- about whether the nation was ready for "transformational change."

Her speech came as United States lawmakers scrapped plans to introduce climate change legislation, potentially setting back global efforts to control the Earth's warming.