But IMF projections comparing the impact of placing a carbon tax ranging from US$25 per ton to US$50 and US$75 on nations around the world have cast doubt on this pledge.
“Whereas a US$25 a ton price would be more than enough for some countries (for example, China, India, and Russia) to meet their Paris Agreement pledges, in other cases (for example, Australia and Canada) even the US$75 a ton carbon tax falls short,” the IMF reported.
Source: International Monetary Fund
The Washington-based fund’s findings suggest that even with direct action to push Australia away from its reliance on coal the nation would fail to meet its commitments.
But Energy Minister Angus Taylor has refuted any idea Australia would adopt such a measure, saying it has already laid out its emissions reduction plan.
"The point of a carbon tax is to raise the price of energy so people consume less," he said.
"Labor’s carbon tax did exactly that, and that’s why we abolished it."
"Our $3.5 billion Climate Solutions Package ... maps out to the last tonne how we will ... reduce emissions to 26 to 28 per cent below 2005 levels by 2030."
The International Monetary Fund is advocating for the carbon taxing measure on a global scale calling it the ‘most powerful and efficient’ means to shift nations away from their reliance on coal.
A carbon tax is designed to push countries towards alternative fuel sources by making fossil fuel generated power less economically appealing.
The IMF said ‘ambitious’ policy action is needed to limit global warming to 2°C or less – the level considered safe by scientists
Prime Minister Scott Morrison has said Australia is "balancing" its global responsibilities with "practical policies" to secure climate action without adverse economic impacts.
Meanwhile, Labor has been caught up in an internal debate over the way forward on emissions with some in the party calling for less ambitious action.
Treasurer Josh Frydenberg said the Coalition was 'confident' it would 'meet' and 'beat' the nation's emissions targets.
“We are track on track to beat out 2020 target and we are confident that we will meet and beat our 2030 target,” he told reporters on Friday.
“You need to have a cost effective transition, and that’s why we’ve put in place a series of measures to do that.”
Australia’s Paris target is to reduce emissions to 26-28 per cent on 2005 levels by 2030.
Labor went to the federal election this year with a 45 per cent emissions reduction target, while the Liberals kept the 26-28 per cent goal.
The International Monetary Fund explained that a climate tax could force the price of coal up by 263 per cent in Australia and see a 75 per cent increase in energy prices.
“The longer that policy action is delayed, the more emissions will accumulate in the atmosphere and the greater the cost of stabilising global temperatures,” the IMF said.
Mr Taylor cited the steep energy price hike linked with a carbon tax as a major concern of the government.
"The report ... states that under a US$75 carbon tax, retail electricity prices would increase by 70-90 per cent in Australia," he said.
"That is not something we are going to do to Australian households and small businesses."
The IMF said nations would need to design the policy response in an ‘equitable and socially and politically acceptable' manner that diverted revenues from the tax to support those vulnerable to ‘higher energy prices’.
A carbon tax implemented by the Labor government was repealed by the Coalition in 2014.
Since then Australia’s greenhouse gas emissions have shown year on year increases.
Australia is responsible for around 1.3 per cent of global carbon emissions and is ranked 15th among the world's biggest emitting nations.
While, on a per capita basis its emissions (16.2 metric tonnes) are ranked only second behind Saudi Arabia (16.3 metric tonnes), and well ahead of the United States (15 metric tonnes) and China (6.4 metric tonnes).