Organisers of the long-running event, which has endured intense scrutiny amid fatal bushfires in the state's south, delayed the 9pm family pyrotechnics by 15 minutes as a cool change crossed the city.

A severe weather warning for Sydney was issued on Tuesday evening, with the Bureau of Meteorology urging those on or around the harbour to take care.

The high winds, gusting up to 72km/h in the harbour, also prompted the cancellation of the 7pm tug boat water display.

Chester Hill man Ross Miller parked himself and a handful of friends under the Harbour Bridge at 8am and said crowds were fairly patient, stoic and loving the festivities.

"You can tell it's a little bit hazy but the air quality at water level is quite good," he told AAP,

"I was thinking we might get some smoke from down south but it's more a southeaster.

"The 9pm fireworks were good but everyone's waiting for the bridge to light up (at midnight).

"We're in prime position and facing it right on the water."

More than $600,000 was raised by 10pm on Tuesday for the Red Cross disaster recovery and relief fund.

"We're proud to harness the power of Sydney New Year's to support people affected by the bushfires," the City of Sydney said.

The fireworks displays, which are a major tourist attraction, had faced political and community opposition, leading Lord Mayor Clover Moore to issue a scathing assessment of the federal government's climate change record.

NSW Deputy Premier John Barilaro and a petition signed by 275,000 people had called for the fireworks to be scrapped and funds redirected to drought and bushfire relief.

But Ms Moore reiterated much of the event's budget was allocated before Christmas, the event generates more than $100 million for the NSW economy, and the council had already donated $620,000 to bushfire and drought-affected communities.

"The compelling issue here is climate change," she told reporters on Tuesday.

"Australia is burning, our national parks and our native animals are being decimated, and our communities are being devastated. People have lost homes, people have died, firefighters have been killed defending communities.

"As the driest continent on earth we're at the forefront of accelerating global warming. What is happening is a wake-up call for our governments to start making effective contributions to reducing global emissions."

The lord mayor said climate change action has been the council's top priority since 2008 and pointed to its movement on emissions reduction.

"Cities around the world are doing their bit to address global warming - it's our national governments that are failing us," Ms Moore said.

Federal Energy Minister Angus Taylor wrote an opinion piece in The Australian newspaper on Tuesday arguing that Australia's emissions reduction performance was something to be proud of.

However, Ms Moore said Mr Taylor was "the minister responsible for addressing global warming, and he has failed".

Despite the NSW Rural Fire Service approving the harbour fireworks, local authorities denied revellers access to three vantage points because of the fire risk.

Australian Associated Press