The UN's climate chief has urged Australia to take more ambitious climate action, as debate over the country's emissions reduction targets heats up in parliament.

"Bog standard is beneath you," Simon Stiell told the country, arguing "colossal" economic rewards could be reaped by aiming higher.

Australia has pledged to reduce emissions by 43% by 2030, but remains one of the world's biggest polluters per capita and faces criticism for continuing to rely on fossil fuels.

Mr Stiell's comments came as a bill to overturn the nation's goal of net zero emissions by 2050 was moved by an opposition MP in parliament, and the Labor government considers a new reduction target for the next decade - 2035.

Speaking at an event hosted by independent industry body the Smart Energy Council, Mr Stiell called the fresh 2035 target - due to be announced in September - a "defining moment" for Australia.