Colin Hunt, School of Economics Discussion Paper No. 440 March 2011, School of Economics, The University of Queensland. Australia.


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The carbon emissions of Australia’s future energy consumption are compared with the emissions targets implied by the cuts in carbon emissions committed to by the Australian government for 2020 and 2050. Analysis shows that even the seemingly modest cut of 5% of carbon emissions by 2020 cannot be met without substantial contributions by low carbon sources that are in addition to the contribution of 20% of electricity supply mandated by the government. The choices in renewable energy are constrained by the need for base-load power to constitute a large proportion of energy supply but the short lead time to 2020 precludes sources that require more development or lengthy planning processes. The official forecasts of energy generation assume a large proportion of Australia’s emissions will be offset through international emission trading. However the prospects for the development of international carbon market are presently poor. The conclusion is that, even with a domestic price on carbon, the Australian government’s 2020 targets for carbon emission reductions are unlikely to be met and should be revised downwards.