The Climate Challenge Fund will support community-led action to reduce emissions and is open to bids from the voluntary sector, charities, schools, colleges, universities, local authorities and housing partnerships.
Environment Secretary Richard Lochhead said: 'There are many things we can do as individuals to reduce our carbon emissions, but by acting and working together as communities we can do much more.
'The £18.8 million scheme is open to a wide variety of organisations to deliver innovative solutions at a local level such as becoming more energy efficient, encouraging people to walk and cycle more, and using local, sustainable food.
'As well as significantly reducing emissions, these measures will also bring wider social and economic benefits to improve quality of life in communities.”
Duncan McLaren, Chief Executive of Friends of the Earth Scotland, said: 'We are delighted to see our proposal for a Scottish Climate Challenge fund finally become reality.
“There are so many opportunities to cut emissions waiting to be unlocked by funding and providing support for communities. We trust that the funds allocated to the scheme will be increased in future years to meet the scale of the challenge.
'A larger, and broader scheme could also ensure that climate emissions reduction schemes also contribute to related Government objectives such as increasing the use of active transport - like walking and cycling, increasing the share of renewable energy generation and cutting fuel poverty.'
Professor Jan Bebbington, Vice Chair of the Sustainable Development Commission, said: “There are a handful of communities already driving change. This fund will encourage and support more action in streets, estates, villages, towns and cities all over Scotland to help get us pointing in the right direction.”