Tony Abbott insists he is not focusing on “hypothetical” long-term emissions reduction targets in the “far distant future”, as pressure mounts on Australia to respond to Wednesday’s surprise announcement by the United States and China.



“I’m focusing not on what might happen in 16 years’ time, I’m focusing on what we’re doing now and we’re not talking, we’re acting,” Abbott told journalists in Burma.

“We are actually cutting our emissions and as a result of the Direct Action policy, which passed through our parliament in the last couple of weeks, I am absolutely confident that we will deliver on our target of a 5% cut by 2020. This is what we want – we want real action and that’s exactly what the world will get from Australia.

“It is all very well to talk about what might happen in the far distant future but we are going to meet our 5% reduction target within six years. So, we are talking about the here and now ... We are talking about the practical; we are talking about the real. We are not talking about what might hypothetically happen 15, 20, 25, 30 years down the track,” he said.

Long-term targets present a problem for the Australian government because deeper emission cuts would be very expensive under its Direct Action policy, which plans to hold competitive auctions for government grants to companies and organisations that want to reduce carbon output.

Using Direct Action to achieve an Australian greenhouse gas reduction target for 2025 which would match the new US promises could cost as much as $30bn, the Climate Institute has calculated.

In contrast to the prime minister’s remarks, the environment minister, Greg Hunt, said Australia would announce its post-2020 target in the first half of next year, ahead of the United Nations conference in December where it is hoped an international climate deal will be clinched.

Hunt said Australia’s existing target to reduce emissions by 5% by 2020 was very close to the emissions reduction the US would achieve by that date, but neither he nor the treasurer, Joe Hockey, would say whether the new US post-2025 target would also be a benchmark for Australia’s longer-term pledge.

Obama has promised to cut US emissions by between 26% and 28% by 2025, compared with 2005 levels. Australia measures emissions cuts against 2000 levels, and calculated in that way an equivalent 2025 target for Australia would be about 30%.

Calculating the cuts necessary to achieve that target from Australia’s current emissions trajectory, the Climate Institute says it would cost $9bn in 2025 to buy the necessary abatement at a very low $8 to $9 a tonne, or $30bn if carbon abatement costs closer to $30 a tonne in 2025, as projected by Treasury.

The current $2.5bn emissions reduction fund is designed only to meet the 2020 target, which is set to become an easier objective because Australia’s emissions have fallen with the closure of heavy industry and the rapid take-up of rooftop solar and other renewables.

Hunt said Australia was “currently reviewing” its post-2020 climate policy. The government has not said how the post-2020 target will be set or whether it will draw on the advice of the expert Climate Change Authority, which it has so far been unable to abolish.

It is understood officials from the departments of foreign affairs and environment are working on policy options.

But according to the Climate Institute chief executive, John Connor, an emissions reduction fund on its own is not going to be able to reach a deeper target. He said the government would need to vary its policy in ways it has so far ruled out – including setting tough “safeguards” to effectively create a baseline and credit emissions trading scheme for industry, or allowing the purchase of less expensive international carbon credits.

“Plainly, the ERF by itself does not add up to credible climate policy. It needs to be replaced or significantly boosted with policies that put the responsibility back on the polluter. This means adding super strong safeguard measures and regulatory limits on major emitters and access to international markets,” Connor said.