The coalition’s “direct action” climate fund could be topped up in a bid to bankroll more emission-cutting projects.

With climate action featuring heavily in the Wentworth by-election loss for the Liberals, some coalition MPs have flagged the idea of adding $1 billion to the dwindling coffers of the Emissions Reduction Fund.

Asked whether the extra funding for the ERF was possible, Prime Minister Scott Morrison told reporters in Canberra on Tuesday: “I’ve never ruled that out.”

“I’ve always said that would be dealt with through the normal budgetary process … so I’ve always been open to that,” he said.

Mr Morrison said renewable energy investment was continuing because it had reached a “tipping point where it just makes economic sense” and no longer needs policy intervention to kick it along.

“No longer does government have to sit around and hold the hand of renewable technologies like it used to.”

Labor climate spokesman Mark Butler said the ERF had not been effective in cutting carbon pollution and was a “colossal waste of taxpayers’ funds”.

The ERF has $249 million left in it from an initial pool of $2.55 billion.