Skip to content
Subscriber Only

Adopt Net-Zero Goal or See Debt Costs Spiral, Australia Warns

  • Climate laggards will face penalty, government modelling shows
  • Investors are starting to pressure nations over coal reliance
Water is sprayed over piles of coal at the Port of Newcastle in Newcastle, New South Wales, Australia.
Water is sprayed over piles of coal at the Port of Newcastle in Newcastle, New South Wales, Australia.Photographer: David Gray/Bloomberg
Updated on

A failure to respond to climate change will lead sovereign debt costs to spiral, according to Australian government planners.

Officials forecast the country’s cost of capital would increase by 100 basis points in an adverse climate-change scenario without its strategy to reach a net-zero emissions target, they wrote in an analysis paper published this month. If Australia was the only developed country without such a goal, the extra cost could jump as much as 300 basis points, they said.