Speaking after the government abandoned negotiations over the staged closure of the Hazelwood power station - often described as Australia's ''dirtiest'' coal plant - the Premier said the Victoria's legislated target to cut carbon dioxide emissions by 20 per cent by 2020 was ''aspirational''.

Mr Baillieu said the key to Victoria reducing emissions was a systematic response from Canberra.

''We have been to and fro [on carbon policy] for four or five years and Victorians want certainty,'' he said. ''What we want to know is what the impact will be on the Victorian economy. What the impact on jobs will be. What the compensation will be. We are not about to embark on any measures that unduly disadvantage the Victorian economy.''

The Coalition's announcement it would walk away from the Hazelwood talks prompted accusations it had no plan to put Victoria on a path to meeting the 20 per cent target.

Asked about his Coalition allowing the former government's climate bill including the target to pass parliament last September, Mr Baillieu said: ''We have indicated before we didn't oppose that legislation. We have always said that that is going to be a target that is going to be difficult to achieve and it is aspirational to that extent.''

The Victorian Coalition supported federal Labor's defunct emissions trading proposal, which was shelved early last year. The Premier has said there remained a great deal of uncertainty over the new plans for a carbon price.

Echoing federal Opposition Leader Tony Abbott's language, Mr Baillieu said last week's state budget set aside funds for ''direct action'' with a $40 million clean energy fund as well as the replacement of street lights and tree planting to help cut emissions.

He said the Brumby government plan to pay International Power to close a quarter of Hazelwood's generation capacity by 2014 was uncosted and unfunded posturing.

''We're not about to embark on a change … which is going to dramatically increase the power bills of Victorians,'' he said.

A spokesman for Hazelwood's majority owner, International Power, said the company was not surprised by the government's announcement.

''We were aware from the Coalition policy that that was what they were intending to do,'' he said.

He said the company remained open to proposals for it to be compensated for the complete closure of the power plant.

It did not favour a partial closure unless accompanied by a plan for the rest of the plant.

Environment Victoria said Mr Baillieu seemed committed to making Victoria a passive observer of whatever climate and energy policies came out of Canberra.