Australia’s Direct Action Plan in its current form would only achieve GHG cuts of 11% below 2000 levels by 2025, analysts Reputex said Tuesday, far below the target range the government is expected to commit to.

Environment Minister Greg Hunt has said the Direct Action Plan – including the A$2.55 billion ($1.91 bln) Emissions Reduction Fund and the safeguard mechanism – will be the government’s key weapon to battle emissions in the future.

Reputex released analysis estimating that the plan would achieve a cut of 11% from 2000 levels, or 18% from 2005 levels, by midway through the next decade.

That would leave Australia well short of emission cuts around 26-30% below 2005 levels, as some members of Cabinet are thought to want.

“While Australia has many options to reduce emissions – such as through greater fuel switching away from fossil fuel electricity – current government policy is unlikely to incentivise many low-carbon activities from being implemented,” Bret Harper, Reputex’ head of analysis, said.

“Should the Direct Action Plan remain as currently designed, we estimate that Australian emissions are unlikely to fall below 500 million tonnes by 2025,” he added. “This indicates that the government’s Direct Action Plan will need to be significantly strengthened to meet the post-2020 emissions target.”

The analysts said the ERF is likely to run out of cash already next year, while the safeguard mechanism as proposed by the government will not do a good job of restraining emissions growth from power, LNG and coal.

“Businesses therefore have no additional financial incentive to invest in emissions reduction projects or offsets,” Harper said.

Australia is expected to announce its post-2020 target later this month, which is likely to be followed by a debate on which policies the nation needs to meet that target.

By Stian Reklev – stian@carbon-pulse.com