SYDNEY, June 17 (UPI) -- A new report calls for 80 percent of global fossil fuel reserves to stay in the ground to avoid climate change.
"The current amount of carbon embedded in the world's indicated fossil fuel reserves would, if all were burned, emit an estimated 286 billion tons of CO2," stated the Australian Climate Commission's report, an update to the commission's 2011 study, "The Critical Decade," examining climate change risks and responses.
Australia's coal reserves alone represent about 51 billion tons of potential CO2 emissions, the report said.
That amount is roughly 1/12 of the global "carbon budget," of about 600 billion tons, which refers to the amount of carbon that scientists estimate can be burned by 2050 without triggering dangerous global warming.
"If emissions could somehow peak in 2015, just two years away, the maximum rate of emission reductions thereafter would be 5.3 per cent, a very daunting task," the report said.
Meantime, global emissions are rising at about 3 percent a year, it says.
"We have to leave most of the fossil fuels in the ground and of course that has obvious implications for investment decisions this decade," Will Steffen, a climate commissioner and co-author of the report, was quoted as saying by the Australian Broadcasting Corp.
Despite projections that coal consumption will continue to grow in India and China, the report is "another piece of evidence" that over the long term, the coal industry would be hit by efforts to tackle global warming, Simon McKeon, Macquarie Bank's executive chairman in Melbourne told The Australian Financial Review.
"The best of the resource investors are absolutely on to this," said McKeon, who is also chairman of the Commonwealth Scientific and Industrial Research Organization, Australia's national science agency. "Anyone who believes they have literally hundreds of millions tons of first-rate, high-emitting CO2 coal can no longer blindly believe there will be a strong market for that in 20, 30 years," he added.
Mitchell Hooke, chief executive of the Minerals Council of Australia, denounced the commission's report, saying that eliminating Australia's coal industry would reduce the country's gross domestic product by between $29 billion and $36 billion per year. Australia has about 6 percent of the world's black coal reserves.
Hooke argues that global coal production and consumption is increasing and that limiting the country's coal exports wouldn't reduce emissions, because coal would instead be sourced from other countries.
"Rather than backing extremist proposals, the Climate Commission should be promoting the benefits of carbon capture and storage as a means of reducing emissions from coal," Hooke said in a statement.