Prime Minister Kevin Rudd said Australia could not afford to sit on the sidelines as the world risked environmental disaster caused by rising atmospheric pollution blamed for global warming.

He said the government's pollution reduction plan, which will include a carbon trading scheme due to start in 2010, was "one of the largest and most important structural reforms to our economy in a generation."

"By the end of 2020, we will reduce Australia's carbon pollution by between five percent and 15 percent below 2000 levels," he told the National Press Club in Canberra.

The targets are well below the cuts some environmentalists have warned are necessary to prevent catastrophic climate change, and the Australian Greens immediately labelled the five percent minimum a "global embarrassment."

A small group of protesters occupied the prime minister's Brisbane office, saying the proposed cuts would "only lead to climate chaos and the loss of national icons such as the Great Barrier Reef and the Kakadu wetlands."

Rudd, who was heckled by protesters as he delivered his address, said the government would reduce emissions by 15 percent from 2000 levels if a global pact on climate change was reached.

This would occur "if there is a global agreement where all major economies commit to substantially restrain emissions and advanced economies take on comparable reductions to that of Australia," he said.

Climate change campaigners are hoping to see a historic pact reached in Copenhagen next December to set down unprecedented measures for curbing emissions of heat-trapping carbon gases.

Rudd said the cuts announced Monday were substantial given that Australia's carbon pollution was projected to rise by 20 percent between 2000 and 2020 if no action was taken.

But they fail to go as far as those recommended by the government's independent advisor Professor Ross Garnaut, who has suggested a cut of 25 percent from 2000 levels if a global agreement is reached.

"We are not going to make promises that cannot be delivered," Rudd said.

"We are starting the scheme with appropriate and responsible targets, targets that are broadly consistent with other developed countries."

By comparison, European Union countries are eyeing cuts in carbon emissions of 20 percent by 2020 over 1990 levels.

Rudd said the government would be criticised for not setting higher targets but he believed they would deliver necessary cuts while supporting the economy.

And he said the proposed carbon trading scheme, which will grant permits to industries to cover the amount of greenhouse gases they are allowed to produce each year, would encourage companies to reduce their carbon footprint.

Rudd's announcement came just over a year after the centre-left Labor leader came to power, promising to bring major coal producer Australia in from the cold on climate change.

He ratified the Kyoto Protocol, the landmark United Nations treaty on greenhouse gas emissions, as his first official act after being sworn in as prime minister in late 2007.

He also committed Australia to a 60 percent cut in emissions by 2050 from 2000 levels.

But his statement Monday has failed to impress environmentalists, with a coalition of more than 60 green groups, including Greenpeace and WWF Australia, condemning his plan.

"If adopted globally, this target would guarantee the loss of the Great Barrier Reef and the Kakadu wetlands, and would steer the earth on a path towards catastrophic climate change," they said.

Australian Greens spokeswoman Christine Milne said the government's policy was a "complete failure."

"Five percent is a global embarrassment, 15 percent is way below even the minimum the rest of the world wants to see," she told ABC radio.

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