



The authority, which the government is seeking to abolish, says the costs of such an increase would be “manageable”, involving a reduction of only 0.02% in annual average income growth per person compared with meeting the 5% target, under “effective” domestic policies, especially if Australia bought some carbon abatement internationally.

But the government’s immediate priority is to abolish the former Labor government’s carbon pricing scheme and implement its own grants-based policy designed to meet only a 5% target.

The environment minister, Greg Hunt, said the government would meet its 5% target through its Direct Action plan and “any additional targets will be reviewed in 2015 in the lead-up to the Paris conference, as has been our longstanding position”. But the Paris conference will negotiate an agreement to take effect after 2020, not the 2020 targets discussed in the authority’s report.

Despite the Coalition’s pre-election bipartisan commitment to increase Australia’s 2020 emissions reduction target to up to 25% under a specific set of conditions for global action set down in 2009, the prime minister, Tony Abbott, has claimed since the election the government had made no commitments to go further than 5%.

“We have made one commitment and one commitment only, which is to reduce our emissions by 5% … we have never made any commitments, any commitments to any binding targets over and above that, in the absence of absolutely clear evidence that other countries are going to take a very serious like approach … and there is no evidence of that,” Abbott said last year.

But the authority says Australia’s 5% target is much weaker than targets set by countries including the US, Britain and Norway, and points out countries such as China are also stepping up emission reduction efforts.

It says all the 2009 conditions for moving above a 5% target have been met, as have many of the conditions for a 15% target.

The government is required to state by 30 April whether it intends to move beyond 5% for its 2020 target. A post-2020 agreement is supposed to be finalised by the end of next year.

The government has ruled out purchasing permits overseas, but the authority recommends it set up a special fund to buy international permits to meet a higher target, which are available at “historically low prices”. It says the government could buy all the permits needed to move from a 5% target to a 15% target by 2020 for between $200m and $900m.

The authority also recommends Australia “carry over” emission credits it accrued during the period of the Kyoto protocol, when Australia easily met a target allowing it to increase emissions slightly, largely due to a pre-existing policy of slowing the rate of land clearing. The authority says these “credits” should be added on to the national effort until 2020 – which would effectively take the national emissions reduction from 15% to 19% below 2000 levels.

Industry groups were quick to reject the report. The Minerals Council of Australia (MCA) said it showed the authority had “lost touch with reality” and demonstrated why “this climate policy relic put forward by the Australian Greens needs to be abolished”. The MCA said a 15% target would cause more job losses and should be ignored.

But the Climate Institute said the report should “shatter the wilful blindness amongst political and business leaders that the current minimum 5% 2020 reduction target is adequate or economically responsible”.

And Greens leader Christine Milne said the report “made a complete mockery” of the Coalition’s 5% target.

The Climate Change Authority is chaired by the former reserve bank chief Bernie Fraser and its board includes the chief scientist, Ian Chubb, and former head of the Australian Industry group Heather Ridout.

It says doing more between now and 2020 will also help Australia meet its fair share of a long-term global effort to slow global warming, which will require domestic emission reductions by 2030 of between 40% and 60%.

The authority points out that Australia’s emissions were about the same in 2012 as they were in 1990, despite a doubling in the size of the economy, an achievement it says was due both to “broader economic forces” and to “policy”. But it says if Australia does not have a carbon price or other “effective” policies from now on, emissions will grow to 17% above 2000 levels by 2020. That, it says, would leave an “improbably large task for future Australians to make a fair contribution to global efforts” to constrain global warming to 2C.

The Coalition’s Direct Action policy – so far allocated $1.5bn – is designed to meet only the 5% minimum target by offering competitive government grants to businesses, farmers and organisations proposing to reduce emissions.

Independent modelling has suggested it does not have enough money to meet even the 5% target, but the government insists it will easily achieve its aims. All analysis suggests it would be extremely difficult to “scale up” to a higher target.

Modelling has also found that cutting emissions further than 5% under Direct Action would be prohibitively expensive – the same charge levelled by the Coalition minister Malcolm Turnbull when he explained in 2011 that continuing to use a big government taxpayer-funded scheme to reduce emissions in the long term would “become a very expensive charge on the budget in the years ahead”.

Pre-election promises by the Coalition would consider higher targets than 5% were made by Hunt, in an article for the Australian Financial Review, in which he said “the Coalition is committed to a target of a 5% reduction in emissions and the conditions for extending that target further, based on international action” and in a speech to the Grattan Institute thinktank in July, when Hunt said “we also accept, and we gave support to the government for the targets, not just the 5% but also the conditions for change ... we accept the targets, clearly, categorically, absolutely”.

And Abbott stated the Coalition’s commitment in a letter to the former prime minister Kevin Rudd in December 2009, subsequently released under freedom of information laws, in which he requested information on the costs of the proposed emissions trading scheme, but also wrote “the Coalition’s position of bipartisan support for emissions reduction targets – subject to the conditions that were earlier outlined – remains unchanged”.