Exclusive: energy analyst finds Australia has been overstating its emissions for years, meaning reduction targets are met while little action is taken

Australia is dramatically overstating its greenhouse gas forecasts and has done so for years, a new study has found, allowing promised climate targets to be met while the country does very little to actually reduce its emissions.

And it warned this continued over-statement was inflating the starting point for the government’s imminent and closely scrutinised pledge on Australia’s greenhouse reductions after 2020 and is likely to attract international attention.

The constant lowering of the estimated greenhouse emission reductions needed to meet Australia’s targets explained why the country was attacked as an international “free rider” by the former UN secretary general Kofi Annan and other international observers,and why at the same time it could claim to be meeting agreed reduction goals, the report’s authors said.

“The overstatement of national emissions projections has occurred under successive Coalition and Labor governments, which see little political value in updating “business-as-usual” assumptions, instead preferring to keep baselines high and beat expectations,” said the report, by the energy market analyst firm Reputex.

Reputex’s chief executive, Hugh Grossman, said the work – updating assumptions in the greenhouse projections about economic growth, electricity demand and trade – showed Australia might still be overstating its emissions by more than 200m tonnes over the next four years, or more than the annual emissions from the entire electricity sector.

He said the overstatement meant the Abbott government was likely to come close to meeting its promise to reduce emissions by 5% by 2020, while doing very little.

And because any reductions beyond that pledge can be carried over to the next so-called “commitment period” – beyond 2020 – “this is also likely to make whatever we promise to do after 2020 much easier to achieve if we are allowed to get away with it”, he said.

Reputex’s calculated “over-statement” comes on top of the government’s recent publicly announced revision to Australia’s greenhouse gas projections, which showed that the task of reducing emissions by 5% required less than a third of the effort envisaged when both major parties signed up to the 2020 target.

In 2012 the promise to reduce emissions by 5% of 2000 levels by 2020 was calculated to require the cumulative reduction of 755m tonnes of carbon dioxide from the atmosphere. In 2014 new government calculations reduced that figure to 421m tonnes. In March that figure was revised again, to 236m tonnes.

But according to Reputex, even the 236m tonnes is a huge overstatement, and the actual greenhouse gas reductions that have to be achieved by government policy could be just 50m tonnes or even less.

Reputex warned that Australia should not be allowed to use any overshoot to make its post-2020 task easier, with Grossman warning Australia could be perceived internationally as “bending the rules in it favour”.

“The findings suggest that the international community may be right to question Australia’s emissions ambition should future write-downs be ‘pocketed’ as an accounting benefit, rather than be translated into greater post-2020 ambition,” the report said.

But this is exactly what Australia has done in the past.

In the 1997 Kyoto agreement, having threatened not to sign, Australia managed to get a special dispensation to increase emissions by 8% in the first period – ending in 2012 – and to count changes in land use.

Almost every other country had to reduce emissions over the same period. Because of land use restrictions already in place when the promise was made, the government knew it could easily meet the pledge and Australia was allowed to “carry over” the excess, or overshoot, to the second commitment period – ending in 2020. That “carryover” represents 129m tonnes of abatement, about the same amount that Reputex thinks the government’s Direct Action emissions reduction fund will buy.

Reputex also warned that when the government claimed the fund was buying more than 100m tonnes of abatement by 2020, much of this comprised emission reductions that would have occurred anyway – without any government subsidy – and it therefore could not be counted towards the international goals.

The report said: “There can be no certainty that the credits awarded to participants always relate to emissions which are genuinely additional to those that would have occurred in the absence of the scheme. Therefore, when estimating the remaining abatement task, care must be taken to differentiate between [credits from the emissions reduction fund] and real emissions reductions relative to government projections.”

Reputex said the constant overstatement of emission projections also rendered the government’s promised “safeguard mechanism” ineffective. The “safeguard mechanism” is supposed to stop polluting industry increasing its emissions and undoing the abatement the government buys from the fund. But because the estimates upon which the safeguards are based are likely to be overstated, industry will be able to increase emissions without any penalty.

The government is scheduled to release its post-2020 target by July, ahead of the United Nations meeting in Paris in December where it is hoped a new global agreement can be reached.