Australia, a major producer and user of coal, has the highest per capita greenhouse gas emissions in the industrialised world. This study investigates whether in theory such a 'fossil-fuel dependent' country could achieve a 50% reduction in CO2 emissions from stationary energy by 2040, compared with its 2001 emissions. To do this scenarios are developed, using a combination of forecasting and backcasting methods, under conditions of continuing economic growth and a restriction to the use of existing commercial technologies with small improvements. The principal scenario achieves the above target by implementing on the demand-side a medium-level of efficient energy use and substantial solar hot water together with a supply side combination of mainly natural gas, bioenergy and wind power. In doing so the scenario also achieves a 78% reduction in CO2 emissions from electricity. Within the large uncertainties in future prices, it is possible that the economic savings from efficient energy use could pay for all or a large part of the additional costs of renewable energy. (c) 2006 Elsevier Ltd. All rights reserved.