PM says goal to reduce Australia’s emissions by 26% to 28% of 2005 levels by 2030 is ‘foursquare in the middle’ of pledges by comparable economies

Tony Abbott says his new emission reduction goal is in line with comparable countries and will cost the economy around $4bn in 2030, but climate groups say it is “pathetically inadequate” and far less than Australia’s share of the cuts needed to stop global warming at 2C.

Abbott said the new target – to reduce emissions by 26% to 28% of 2005 levels by 2030 – was “foursquare in the middle” of the pledges comparable economies will take to the United Nations meeting in Paris in December.

“It’s better than Japan. It’s almost the same as New Zealand. It’s a whisker below Canada. It’s a little below Europe. It’s about the same as the United States. It’s vastly better than Korea. Of course, it is unimaginably better than China,” Abbott said after gaining the approval of his party room for the new post-2020 goal.

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But conservationists said the target left Australia looking like a laggard – because measured on like-for-like basis, the US had promised cuts of around 41% by 2030, the European Union by around 34% based on 2005 levels, Canada of 30% and Japan – struggling with the impact of the Fukushima disaster on its nuclear industry – 25% on 2005 levels. The average of developed nation emission reductions, using the 2005 base year, is about 36% by 2030.

Abbott confirmed that modelling for the government by leading economist Warwick McKibbin found the target would reduce gross domestic product by 0.2 or 0.3% in 2030.

“The modelling shows that what we have in mind is not cost-free to the economy. There is no cost-free way of substantially reducing emissions,” he said.

The modelling also found Australia could meet tougher greenhouse gas emission targets of 35% without much extra economic pain – with a 35% cut by 2030 increasing the cost to GDP in that year by 0.3% to 0.5% of GDP. The prime minister said modelling had also shown a 40% cut would cost 2% of GDP – that higher targets always had much higher costs. The McKibbin modelling did not make this finding – it found that a 45% cut would cost between 0.5% and 0.7% of GDP in 2030.

Leading analysts have questioned whether the government can meet the target using its “Direct Action” policy.

The Climate Institute has calculated the 2030 cost of the pledge would be $16bn if the government was paying $60 a tonne for emission reductions and $37bn if it was paying $135 (as the independent Climate Change Authority said would be needed by 2030 to meet a 25% reduction)

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Abbott and his environment minister Greg Hunt said the target it would be met by spending $200m a year on Direct Action, as well as new energy efficiency and vehicle efficiency standards and “technology improvements and other sources of abatement, which Hunt said would include “improvements to battery technology”.

Hunt also said he expected Australia to exceed its minimum target of 5% reductions by 2020, which would mean it had “credits” to “carry over” to count against the 2030 target.

At the moment, the foreign minister, Julie Bishop, is scheduled to lead Australia’s delegation to the Paris conference, but Abbott did not rule out attending himself.

“If there were a substantial number of major economy leaders there, obviously I’d go. I mean, it would be foolish not to go if there was the opportunity to meet on a whole range of subjects with the leaders of other economically significant countries,” he said.

The new targets do not require Australia to contribute its share of a goal to limit global warming to 2C.

The CCA recommended a reduction of 40% to 60% reduction on 2000 levels by 2030 as Australia’s fair share, which equates to a 45% to 63% cut from the higher emissions in the 2005 base year. Labor’s national conference promised to listen to advice from bodies like the CCA, but Labor has not yet committed to a specific target.

“We want to see the modelling before we make a decision, but 26% certainly puts us well towards the back of the pack compared with equivalent countries,” Labor’s environment spokesman, Mark Butler, said.

The chief executive of the Climate Institute, John Connor, said 26% would be “pathetically inadequate” and still leave Australia as “the highest per capita emitter in the world.”

“The target is bad for the climate and bad for our international competitiveness,” he said.

“If other countries took the same approach as the government announced today, the world would warm by 3-4C.”

The Australian Conservation Foundation’s chief executive, Kelly O’Shanassy, said “the target proposed by the government is bad news for life in Australia, out of step with other countries and inconsistent with the global commitment to keep global warming below 2C.”

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“It’s a defeatist target that shows no faith in the ability of Australians to adapt, innovate and make the transition to a clean economy.”

But the Business Council of Australia said the target would be a challenge.

“The community must realise that much of the low hanging fruit has been picked in the emissions reduction challenge and taking the next steps beyond 2020 will require significant changes in industry activity and investment, and community behaviour, which must be managed carefully,” the BCA chief executive, Jennifer Westacott, said.

Innes Willox, the Australian Industry group’s chief executive, said the target was in line with other countries’ commitments and it was essential the government used “least cost policies” to meet the target.

“The new target is a major step change from anything deliverable by current policies. For comparison, if the target were delivered solely through Budget spending it would cost between $100bn and $250bn in unadjusted terms,” he said.

But the foreign affairs minister of the Marshall Islands, Tony de Brum, said the “weak target” was “another example of Australian exceptionalism when it comes to tackling the biggest economic, environmental and security challenge of the 21st century”.

“If the rest of the world followed Australia’s lead, the Great Barrier Reef would disappear. So would my country, and the other vulnerable atoll nations on Australia’s doorstep,” he said.

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Both major parties committed to a cut of between 5% and 25% by 2020. Australia is likely to meet a 5% target, primarily because of lower electricity demand and the closure of heavy manufacturing.

The government’s modelling showed that allowing business to buy international permits could halve the economic cost of meeting the target. Business has pleaded with the government to drop its ban on international permits. The government has agreed to leave this decision “on the table.”

“We believe that we can meet this target without access to international units. Business is keen for us to leave international units on the table and we will do that but we believe we can achieve this without needing to access international units,” Bishop said.

Abbott said: “it seems to me that if Australia is going to do its duty by the international community and, indeed, in the task of emissions reduction, these should be domestic reductions in emissions rather than instantly rushing off to try to get them from other countries.”