Long-term climate change goals will be missed, and clean energy investment will stagnate, if Australia does not start forcing its dirty coal-fired power plants to close, new analysis has found.

Economic modelling commissioned by the Climate Institute also suggests that putting off closure until after 2030 would force the country into more-extreme measures to meet the longer-term goals of the Paris climate agreement.

That could include a hurried closure of more than 80 per cent of existing coal power generation in the five years following 2030, causing significant economic and social disruption, particularly in communities dominated by the industry such as the Latrobe Valley.

A smoother transition could be achieved, the Climate Institute argues, by quickly adopting new laws to progressively phase out all high-emitting power plants in the next 20 years. They would sit alongside a carbon price and incentives for cleaner energy alternatives such as renewable and carbon capture and storage technologies.

Institute chief executive John Connor said the modelling showed a shift to a cleaner electricity supply could be achieved through "a policy package that actively supports both clean energy investment and the orderly replacement of our ageing coal-fired power stations".

Under the Paris climate deal hammered out last year, Australia was among the 195 countries that agreed to keep global warming "well below" an average two degrees increase, aiming for less than 1.5 degrees.

Australia's best chance of achieving that goal would be to cut emissions to effectively zero by 2050, the institute says. To do that,  90 per cent of electricity would need to be generated from clean sources.

The modelling – by energy market consultants Jacobs – found an emissions trading scheme alone would not be enough to drive that power transition unless it had a high carbon price, which could prove politically testing.

A trading scheme with a more modest price could meet Australia's immediate goal of cutting emissions 26 to 28 per cent by 2030, the modelling found.

But it would also mean renewable energy investment stalling through the 2020s and almost no existing coal plants would be replaced, leaving Australia to catch up in the years after 2030 with more-extreme action.

The modelling suggests a combination of a modest carbon price, a limit on a coal plant's life of 45 years and a 50 per cent clean energy target for 2030 would best manage the energy transition required by the Paris goals.

But the modelling also found it would cost about $50 billion more during 30 years than using an emissions trading scheme alone. The Climate Institute argues this should be seen as the price of avoiding the risks associated with delaying the clean energy transition until after 2030.

The federal Coalition government has opposed carbon pricing, and has instead put in place its direct action climate policy. But some observers believe elements of direct action, which place emissions limits on large polluters, can evolve into a trading scheme.

A review of climate policies is slated for 2017.

The Labor opposition has promised to reinstate an emissions trading scheme if elected. It has also pledged to ensure 50 per cent of electricity generation comes from renewable energy by 2030.