Australia Needs More Realism on Coal’s Future, Carney Warns

(Bloomberg) -- Australia has huge potential to attract green investment if the country can offer more clarity on climate action and accept there’s no future in coal, according to Mark Carney.

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Steps by the country’s new government to legislate for steeper targets to cut greenhouse-gas emissions will help offer policy certainty, and should be backed with a more decisive approach on the country’s shift away from fossil fuels, the former governor of the Bank of England and the Bank of Canada told a Melbourne conference Thursday via videolink.

“It does nobody favors to deny that coal is ultimately going to be phased out, and the faster it is phased out the easier the transition is going to be for the rest of the economy,” said Carney, head of Brookfield Asset Management’s Global Transition Fund, which last month raised $15 billion to invest in solar power and other green technologies.

Though Australia’s Prime Minister Anthony Albanese has pledged to accelerate the nation’s efforts to cut emissions, his new government has rejected calls for a moratorium on new fossil fuel projects and flagged continued support for the A$104 billion ($73 billion) coal export sector. Any halt to Australia’s sales of thermal and steelmaking coal would simply encourage the use of more polluting material from other suppliers, Albanese has argued.

Governments, companies and investors need to embrace inevitable changes to the energy mix much faster to ensure the right efforts are being made to retrain workers and support impacted communities, Carney told the Australian Council of Superannuation Investors conference.

“Australia is called the lucky country for a reason,” Carney said. It’s “lucky in conventional energy resources and many other things, and of course you have absolutely extraordinary potential -- and it is only beginning to be realized.”

Brookfield in March was rebuffed in a multibillion-dollar takeover approach for Australian utility AGL Energy Ltd., which centered on a plan to shutter the company’s coal-fired plans faster and boost investment in renewables.

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