The government's climate change white paper action plan announced this week will allow businesses, government and individuals to offset greenhouse emissions through a central offset purchasing system.

"The Victorian carbon exchange will create an incentive for landholders and forest operators to develop offsets through activities such as new forest plantations, improved farm practices and soil carbon sequestration," Premier John Brumby said.

Mr Brumby also said $160 million would be spent on refitting government buildings to higher energy efficiency including upgrades to South West Insitute of TAFE campuses and 62 regional public schools.

He also listed $4 billion of investment in wind generation and geothermal generation to flow from a 20 per cent national renewable energy target.

In other sections of the plan the government announced a local government summit for October and promised to help councils upgrade street lighting with low carbon technologies.

South-west councils earlier this year supported a statewide push for more goverment assistance in upgrading old-technology street lighting.

Household, business and community organisations will be given access to new schemes and incentives to purchase energy-efficient fittings and equipment.

Warrnambool's mayor Cr Michael Neoh welcomed the white paper, but said the government must set an example for the rest of the state in better efficiency in its fleet and facilities.

Drivers will also be urged to pay extra on their registration bills to offset their carbon emissions.

Environment and Climate Change Minister Gavin Jennings said drivers could offset all their vehicle's emissions by paying an extra $80 a year.

"People can choose to offset part or all of their vehicle emissions," he said.

The Government will also double the rebate on registrations for hybrid vehicles to $100.