National environment group Friends of the Earth says the Federal Coalition's 2018 budget failure on climate change comes as "no surprise" and underscores the need for greater leadership from states and territories.

"Treasurer Scott Morrison used the budget speech to rule out setting the ambitious Emissions Reduction Targets needed to avoid dangerous climate change. And he did so without mentioning climate change," said Leigh Ewbank of Friends of the Earth.

"Mr Morrison's refusal to mention climate change in the budget address is a slap in the face of community members who are exposed to the intensifying climate impacts such late-season bushfires."

Despite climate change impacts becoming more obvious and demanding urgent attention, the 2018 budget papers show a steady decline in investment in climate change. Initiatives such as the well-performing Clean Energy Finance Corporation and controversial Emissions Reduction Fund taper off over the forward estimates.

"Given that we're seeing alarming melting of the polar icecaps, the decline of the Great Barrier Reef, record-breaking heat in April, and late-season bushfires, political leaders of substance would be making climate change a priority."

"Australia needs to arrest the declining investment in climate solutions if we're to make headway on international commitments to cut emissions."