Government’s modelling of the cost of different post-2020 greenhouse emission targets reveal more ambitious cuts won’t cost much more than modest ones

The Abbott government has commissioned its own secret modelling of the economic cost of different long-term greenhouse emission targets to be debated by cabinet on Monday, and it is understood to show more ambitious goals would not cost much more than modest ones.

The environment minister, Greg Hunt, went on the attack against Labor on Monday after the Daily Telegraph reprised 2013 modelling for the Climate Change Authority on the costs of cutting emissions by between 40% and 60% of 2005 levels by 2030.

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“It will see tens of thousands of jobs lost, power bills skyrocket, wages will be lower and the economy will be more than half a trillion dollars weaker,” Hunt said.

Asked on ABC radio whether the modelling was up to date, Hunt said: “It’s not that old, but more to the point ... if they have different figures, produce it.”

But Guardian Australia understands the Department of Foreign Affairs has commissioned leading economist and former Reserve Bank board member Warwick McKibbin to model the costs from the industrial and electricity sectors of various post-2020 targets being considered by the current government, between 20% and 35% of 2005 levels by 2030. McKibbin also modelled the impacts on Australia of climate commitments made by other countries.

The foreign minister, Julie Bishop, and Hunt are understood to have argued, during an earlier cabinet debate, for a reduction of between 25% and 28% on 2005 levels by 2030 – but others in cabinet have expressed concern that the government won’t get any political credit for taking on an ambitious goal.

Sources familiar with the McKibbin modelling said it showed little difference in the economic impact of the various targets on the table. McKibbin declined to comment when contacted by Guardian Australia.

It is possible the government may announce a target for 2025, rather than 2030, which would mean the target number could look lower, while leaving the way open for more ambitious action in the future. The United States has announced a 2025 target.

Successive modelling exercises have shown one of the biggest factors in reducing the economic cost of climate action is whether businesses are allowed to buy offshore permits. The Coalition has insisted international permits should not be allowed, despite the pleas of most major business groups that they be included. Another factor is the impact on Australia of the climate policies being adopted by other countries.

Labor’s environment spokesman, Mark Butler, said the modelling referred to by Hunt was “ridiculously outdated and fails to take into consideration the huge fall in the cost of renewable energy or the decline in electricity demand due to the fall in manufacturing”.

Hunt’s attack is based on the motion passed at last month’s Labor party conference that the party should base post-2020 pollution reduction targets on up-to-date advice from expert bodies such as the Climate Change Authority, the CCA’s previous advice that Australia’s fair share of an agreement to limit global warming to 2C would be a cut of between 40% and 60% of 2000 levels by 2030 and the historic modelling of that commitment.

Asked whether the government would adopt a target commensurate with meeting Australia’s fair share of a global effort to contain warming at 2C, Hunt told the ABC’s AM program: “Well, what the Paris conference will do is bring the world significantly towards that outcome.”

“The French, to their absolute credit, have set the goal of making real progress towards the 2C target and we support, endorse and embrace that.”

The target range on the cabinet table is not considered equivalent to Australia’s fair share of a global effort to limit warming to 2C.

Hunt said the Coalition’s Direct Action plan would be a cheaper way to achieve whatever goal Australia adopted.

“What we see here is two very different paths – one of a nearly $5,000 per household hit; the other where we see that we are making credible, strong, effective reductions in emissions through directly targeting emission reductions.”

In fact, historic modelling of the possible cost of using Direct Action to meet post-2020 targets found that it would cost at least $16bn a year by 2030.