Australia signed on to the global Paris agreement to cut emissions and limit warming to below 2 degrees on Saturday, local time.

But Ernst & Young have been asked by the NSW department's resources and energy division to model two scenarios for coal-fired generation, demand and emissions in NSW from 2015 to 2050 – one with no emission reduction policy, and the second with a "basic" emission reduction policy.

The Climate Institute's chief executive John Connor said it was "extraordinary" to assume there would be no need to cut emissions.

"We have moved beyond that. It's really now a debate about how quickly we get to zero net emissions and below," said Mr Connor.

"That is what the Australian government have signed up to with the Paris Agreement. There is a remarkable consensus about that objective."

NSW Greens energy spokesperson Jeremy Buckingham said: "The Baird government is making itself a laughing stock with its inability to accept that the nations of the world are moving to reduce emissions and coal consumption. Modelling a future with no emissions reduction policy is ridiculous and a waste of time and taxpayers' money."

Mr Buckingham said the "only real options" were a basic emissions reduction policy and a strong emissions reduction policy.

The contract with Ernst & Young suggests the Baird government is considering the introduction of a state-based emissions reduction policy, but the industry is pushing back against this.

The study will examine options NSW can "put in place to test outcomes if an emissions reduction policy is introduced". It will assess criteria for low emission coal technologies.

Asked if NSW would develop its own policy, a department spokeswoman said: "The NSW government is committed to the security, reliability and affordability of our energy supplies and we always want to understand the implications of different scenarios so that we, in conjunction with other jurisdictions, are able to have well informed government policy development."

Mr Connor was sceptical of carbon capture and storage, and said it was too late for clean coal technologies.

"We need all coal out in the next couple of decades."

Worldwide this year investment in renewable energy has been double that of coal and gas, he said.

"The problem in Australia is we are not going to see that clean energy investment until we have tackled the clunking power stations that dominate power supply, not just in NSW."

He said Australia had to start making an "orderly transition".

The NSW coal industry has been hit by lower global coal prices and a number of multinational miners have sold mines as prices fall.

BHP Billiton is reported to have told market analysts this month there would be a massive drop in earnings for thermal coal if the world meets its pledge to limit global warming to 2 degrees.

Mr Buckingham said the NSW Government should be studying how to transition to clean renewable energy.

Mr Connor said the NSW Government had done little on emissions reduction.

He said the most positive interpretation of the study is that "it might be the government coming out of slumber on climate policy – but it should be made clear the goal is net zero emissions."