The economic modelling used by the government to set its post-2020 emissions reduction target shows the cost of slashing carbon pollution is below that stated by Prime Minister Tony Abbott.
Mr Abbott this month revealed Australia's 2030 target of a 26 to 28 per cent reduction on 2005 levels, saying his government was not about to damage the economy.
He said modelling had found a 40 per cent target by that year would result in a $40 billion reduction in gross domestic product - compared with a $3 billion to $4 billion reduction at 26 per cent.
"The modelling that we have done suggests that achieving a 40 per cent reduction by then will be much more expensive," he said at the time.
"It will be over two per cent of GDP, so that's in the order of $40 billion."
However, the modelling - commissioned for the Department of Foreign Affairs and released on Friday - shows a target of between 35 and 45 per cent would reduce GDP by about one per cent.
"By 2030, all impacts are no more than one per cent of GDP," the report states.
"A post-2020 target will cause a small slowing of economic growth."
The report - by former Reserve Bank board member Warwick McKibbin - says the economy is "expected to grow strongly" regardless of whether Australia adopts a post-2020 target.
The Climate Institute says the modelling shows Australia could catch up with the rest of the world on climate change action and still experience strong economic growth.
"It's confirmed that all of the economic scaremongering on emissions reductions and economic growth are wrong," deputy chief executive Erwin Jackson told AAP.
"All economic analysis in Australia has always shown that you can grow the economy strongly and reduce emissions."
Labor and climate groups maintain a 26 per cent target by 2030 puts Australia at the back of the pack when it comes to action on global warming.
Share
