The Australian Treasury has released economic modeling of the potential economic impacts of reducing emissions. The report, Australia’s Low Pollution Future: The Economics of Climate Change Mitigation is available for download here.

The Treasury report has some very interesting clues about what targets the government is considering. One (CPRS-5) is for Australia to have a 5% reduction by 2020 compared to 2000 levels and 60% by 2050. The other (CPRS-15) is for Australia to have a 15% reduction by 2020 compared to 2000 levels and 60% by 2050. They claim that CPRS-5 would correspond to a global stabilisation target of 550 ppm and CPRS-15 would correspond to a global stabilisation target of 510 ppm.

There is no way in hell that the international community could accept a 5% reduction from Australia that corresponds to a 550 ppm target, or 15% corresponding to a 510 ppm target. These targets would involve Australia free-riding on other countries emission reductions. This suggests that Australia is more interested in an international bargaining position that is based on Australia doing as little effort as it can get away with as possible for a given stabilisation target. The report assumes a `multi–stage’ approach for international emission allocations, where all developed countries are allocated the same reduction in emissions. This rewards high per-capita emitters (like Australia) and punishes low per-capita emitters. This suggests that Australia’s international bargaining position is based on rent-seeking. The Contraction and Convergence scenario’s suggested by the Garnaut Review have a very late convergence date of 2050, which also rewards high per-capita emitters.

It is worth noting that even the `multi–stage’ approach is not consistent with Australia’s emissions being as high as 60% reduction by 2050.

More realistic targets for Australia that are based around these dangerously high stabilisation targets are 15-40% reductions by 2020 for 550 ppm and 20-45% reductions by 2020 for 510 ppm. My estimates are based on a Contraction and Convergence agreement with convergence dates between 2030 and 2050 and with international trading of emissions allocations.