The findings represent a significant decrease on the 2008 estimates, which found that Australia could reduce emissions by up to 60% by 2030.
Climate policy uncertainty over the last five years was blamed for the decrease, which the report said had left the economy with fewer options to cut domestic emissions and at a much higher cost of action, estimated to be about $10.6 billion.
According to RepuTex executive director Hugh Grossman, the lack of a clear climate policy has resulted in delayed investment in long-term emissions reductions over the past five years and extended the economic lifespan of more carbon-intensive technologies.
"The new data indicates that a significant proportion of Australia's earlier 2030 emission reduction potential has been lost due to delayed investment, due largely to policy uncertainty around the carbon tax, and more recently, the renewable energy target," Grossman said.
"In the absence of strong, continual climate policy, investment in clean electricity generation, forest protection, and energy efficiency has not been as strong as it could have been, meaning that existing carbon-intensive assets are able to continue to compete against new technologies rather than being phased out, locking in emissions growth in the near term."
"This can be seen with the return of coal generation to Australia's fuel mix and the slowdown in renewable energy investment, along with lower investment in building energy efficiency and sequestration projects," Grossman added.
RepuTex's report is the first to forecast Australia's marginal cost of abatement through to 2030 since McKinsey & Company's 2008 research.
It analysed 88 separate opportunities to reduce emissions across six key sectors comprising power, forestry, industry, buildings, agriculture and transport and identified actions to reduce emissions, the barriers to their implementation and their relative cost.
Reputex's analysis also took into account changes in gas and electricity prices, electricity demand and policy, including the repeal of the carbon tax.
The government is expected to announce its 2030 emissions reduction target in the upcoming months and is under pressure to announce a 40% to 60% cut in emissions by 2030, leveraging both domestic and international emissions reductions.
According to RepuTex, the forestry industry and power sectors are likely to provide the largest share of abatement across the economy by 2030, contributing approximately 75% of all emissions reductions.
Meanwhile, the report said energy efficiency would play the largest role in the country's emissions reductions, contributing more than a third of all abatement through to 2030, with many projects being 'negative cost', which would save money over the life of the project.
Cost of meeting 2020 target grows
RepuTex's report follows the release of figures by the government showing that national emissions fell 1.4% over the 12 months to June 2014, driven by a combination of lower electricity demand and the repeal of the carbon tax.
While Environment Minister Greg Hunt remains confident Australia will meet its 2020 emissions reduction target, Grossman noted electricity emissions have begun to increase after the repeal of the carbon tax, while the cost for industry to implement abatement activities has also risen following the repeal of the carbon compliance market.
"Findings indicate that Australia will be able to achieve a 5% reduction in domestic emissions by 2020, however, the cost of these cuts is forecast to be $5.3 billion, more than double the $2.55 billion allocated to the government's Emissions Reduction Fund," Grossman said.
"Without a strong safeguard scheme that is able to work with the Emissions Reduction Fund to drive more emissions cuts, meeting Australia's 2020 emissions target through domestic emission reductions will be both extremely challenging and expensive.”
The first auction under the new Emissions Reduction Fund will take place in mid-March.
