Professor Ross Garnaut, Australia’s climate change advisor, has handed down the second part of his report on greenhouse gas reduction.

Professor Garnaut’s report says that ideally Australia should aim to reduce emissions to 25% below 2000 levels by 2020 but concedes that this target is probably unattainable. It suggests that an attainable target, if an international post-Kyoto agreement is reached by 2013, would be to reduce emissions to 10% below 2000 levels by 2020. If there is no agreement, then only a 5% target would be realistic.

To achieve the 10% target, the report says that a price of $20 per tonne of carbon emitted needs to be set from 2010, rising by 4% plus inflation per annum from 2012 until 2020. Setting a higher price would drive industry offshore and not achieve greater emission reductions.

In other words, carbon trading can only deliver a 10% reduction at best by 2020 – although a much higher reduction of 25% is desirable.

In the longer term, the report recommends a target of an 80% reduction by 2050 – higher than the 60% reduction target set by the Government.

In international negotiations, the report says that Australia should  argue for stabilisation at 450 parts of carbon dioxide per million although 550 parts per million is more likely to be agreed. Even 450 parts per million would not guarantee saving sensitive areas like the Ningaloo Reef in Western Australia.