The global allowance, set by the U.N. Intergovernmental Panel on Climate Change, refers to the maximum emissions that can be released in coming decades to give the world a chance to keep global warming at less than 2 degrees.
More than half of the world's carbon budget has already been used up, notes the WWF, which commissioned global consultants Ecofys to analyze Australia's position.
While Australia's fair share of the world's carbon budget is estimated to be no more than 18 billion tons, it has already used up 66 percent to 84 percent of that amount, the report released Monday found.
The report was issued as governments prepare to meet in Warsaw, Poland, for the next round of international climate talks, scheduled to begin Nov. 11.
Australia is the world's highest per-capita carbon emitter among developed nations.
"Everyone knows that we're a fairly pollution-intensive economy and we've got a big job ahead of us," Will McGoldrick, WWF Australia's head of climate change policy, told the Australian Broadcasting Corp. "But it was a little bit alarming to see that we've already used up around two-thirds of that long-term budget."
Australia has committed to cutting its emissions at least 5 percent below 2000 levels by 2020 and to increase that target to as much as 25 percent if other countries take similar action.
But the group says an emissions cut of 25 percent by 2020 is the bare minimum Australia should achieve, based on 2000 levels.
"If annual emissions remain at the current level, Australia's entire budget would be used up in a little over a decade, if not sooner," the group's report states.
"We need to bite the bullet and accept that Australia has a big job ahead of us, and we need the policies and the mechanisms in place that can deliver at least a 25 percent cut by 2020 in our carbon pollution and much deeper cuts beyond that," McGoldrick said.
The Australian government's Climate Change Authority is expected to release draft recommendations this week on how much and how quickly Australia should be cutting emissions. The draft report will be released even though the new coalition government, which took office last month, has pledged to abolish the authority as part of its scrapping of most climate change policy from the previous Labor administration.