At the last federal election, the BCA described Labor's 45% emission reduction target by 2030 as "economy wrecking", now it's saying Australia's would be A$5000 per year better off under the same, or higher target, calling its target "pragmatic and ambitious". 

"The purpose of our work is to move forward, not engage in an endless debate about issues the nation and the world has moved past," BCA president Tim Reed said.

"Our biggest trading partners are already making this transition and Australian businesses are taking action, as are global capital markets." 

The report highlights that demand for Australia's exports are at risk as the US, UK, Japan and South Korea declare they will reach net-zero emissions by 2050 while also substantially increasing their 2030 ambitions and investors seek to ensure their portfolios align with those targets.

"Decarbonisation plans are no longer a separate or side issue, but have become core to investor's portfolio allocation decisions," it said. 

The report said Australia could reap a $890 billion economic dividend and create nearly 200,000 jobs over the next 50 years if such a target were to be introduced. 

"Setting a more ambitious interim target now will drive new investment and bring forward action in sectors such as electricity where we can deploy commercially viable technology at scale," Reed said. 

The report calls for a strengthening of the government's Safeguard Mechanism, reducing the eligibility threshold for entities covered from 100,000 tonnes of CO2 per annum down to just 25,000tCO2pa.

This would significantly increase the number of companies covered under the scheme, with the BCA arguing it would send a powerful market signal to start cutting emissions. 

It also calls for the baselines to be reduced predictably and gradually over time to align with Australia's proposed emissions budget out to 2050. 

"The purpose of the carbon investment signal is to help incentivise the deployment of zero and low emission technologies and closing critical technology gaps inhibiting the transition to a net zero emission economy in an economically efficient manner," the BCA said.

Grattan Institute energy director Tony Wood has long called for the Safeguard Mechanism to be given more teeth, saying in a report released in August that new benchmarks needed to be established to ensure large facilities were sufficiently reducing emissions. 

Commenting on the report, APPEA chief executive Andrew McConville said any changes to the safeguard mechanism needed to consider the treatment of trade exposed industries like LNG. 

"The Australian government estimates Australia's LNG exports have the potential to lower emissions in LNG importing countries by around 170 million tonnes CO2-e each year," he said. 

The BCA report called for ongoing support for hard-to-abate sectors, saying research and development must be incentivised to find ways to avoid locking in emissions in assets that can last over multiple decades. 

The report also recommends the government's Climate Change Authority advise on 10-year emissions budgets and coordinate action across business, government and regulators, similar bodies already present in the UK and New Zealand and proposed in legislation put forward by independent MP Zali Steggall.

The BCA report was welcomed by Jemena managing director Frank Tudor, saying it was a sensible pathway towards a net-zero future. 

"This strategy reiterates many of the calls industry has been making which we believe will give investors the certainty and confidence they need to invest in Australia's energy markets over the long term," he said. 

"By taking a considered approach towards the energy transition, the strategy effectively balances energy reliability and affordability with the need to decarbonise our energy system." 

Federal energy minister Angus Taylor has poured cold water over much of the report's findings over the weekend, describing its call for a Safeguard Mechanism with teeth a "carbon tax". 

"The BCA's recommendation to expand the Safeguard Mechanism and bring down baselines [emissions] would force companies to reduce their emissions, regardless of whether economically viable technologies are available, risking competitiveness and jobs - this is a carbon tax," he said. 

In a speech at this morning's Australian Financial Review Energy Summit, he said "voluntary incentives, not penalties, are an essential part of our plan to play our part in global efforts to reduce emissions". 

*Updated to include comment from APPEA CEO Andrew McConville*