The Climate Change Authority (CCA) said Australia risked losing its competitive edge if it did not accelerate emissions reduction strategies.
Instead of the current commitment to lower greenhouse gas emissions by five percent of 2000 levels by 2020, it said Australia ought to target a minimum reduction of 15 percent.
Doing so would only slow annual growth in average per person income by 0.02 per cent, the authority said in a new report.
CCA is an independent body set up by the previous Labor government and which the new conservative administration is trying to abolish.
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In the United States the target was a 17 percent reduction on 2005 levels by 2020, Britain was aiming for a 34 percent off 1990 levels and Norway was targeting a 30-40 percent decrease from the same period.
"A target of 15 percent for Australia would be more in line with the targets being pursued by such countries," the report said.
Prime Minister Tony Abbott once described the science behind man-made climate change as "absolute crap" and dismisses any link between global warming and increasing frequency of events such as drought and wildfires.