Australia adviser urges cautious carbon targets

CANBERRA (Reuters) - Australia's top climate adviser on Friday recommended cautious targets for the country's carbon emissions trading scheme, with carbon to be priced at A$20 ($16) a tonne from 2010 and overall emissions to be cut between 10 and 25 percent by 2020.

In an updated report on targets for a trading scheme, academic Ross Garnaut said the new emissions targets would cut Australia's gross domestic product by between 1.1 and 1.6 percent by 2020.

Australia is the world's 16th biggest carbon polluter and produces about 1.5 percent of global emissions. But Australia is the fourth largest per-capita emitter, with five times more carbon pollution per person than China.

Australia's centre-left Labor government has promised to introduce carbon trading from July 2010 to help the country cut its carbon emissions, but has come under attack from companies who say the scheme could drive some firms out of business.

The government, which has made the carbon scheme a central plank of its policy, says it is willing to talk to business about the scheme, and has said Garnaut's report is only one source of advice.

Garnaut proposed two models for the trading schemes: an aspirational one and a more practical one, with the aspirational one setting more ambitious targets.

Environment ministers and negotiators will meet in Copenhagen in late 2009 to try to work out a new agreement on to curb global emissions, to come into force after the Kyoto Protocol agreement ends in 2012.

Garnaut said Australia should push for the new agreement to set a strong target to cut worldwide emissions to 450 parts per million tonnes of atmospheric carbon, although cuts to 550 parts per million were more achievable.

"On the balance of probabilities, we are too late to avoid major impacts of climate change," Garnaut said.

For Australia, a strong target of 450 parts per million would mean carbon emissions would need to fall by 25 percent of by 2020, and 90 percent by 2050, based on 2000 levels.

Under the more practical international target of 550 parts per million, Australia would need to cut emissions by 10 percent by 2020 and 80 percent by 2050, well above the government's target of a 60 percent cuts by 2050.

Garnaut said the Australian carbon price should start at A$20 a tonne, rising by four percent above inflation until 2013, when it would be set by the market.

He said Australia should set its own target of a five percent cut in emissions by 2020 if talks in Copenhagen fail to reach a global deal.

($1=A$1.22)

(Reporting by James Grubel)