Australian treasurer warns of financial risks if net zero is not adopted

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Birds and a plane are seen flying over the emissions from the chimneys of a chemical plant near Port Botany in Sydney, Australia, June 2, 2017. REUTERS / David Gray

SYDNEY, Sept. 24 (Reuters) – Australia must prepare for higher borrowing costs if the country fails to match other developed countries in their efforts to reduce carbon emissions to net zero by 2050 Treasurer Josh Frydenberg said on Friday.

“Australia has a lot at stake. We cannot run the risk of the markets mistakenly assuming that we are not transitioning with the rest of the world,” Frydenberg said in a speech to the Australian Industry Group, whose excerpts have been reviewed by Reuters. .

Australia, the largest per capita carbon emitter among the richest nations in the world, has resisted international pressure to commit to a net zero carbon target for 2050.

Prime Minister Scott Morrison is expected to agree on the government’s climate policy ahead of the COP26 climate summit in Glasgow in November, but faces opposition to a net zero target from some members of his conservative coalition in the to be able to.

Current policy is to reduce emissions by 26-28% by 2030 from 2005 levels, along with a commitment to spend A $ 18 billion ($ 13 billion) over 10 years on a range of technologies. reducing emissions, such as hydrogen, energy storage and carbon capture and storage.

Frydenberg will point out that Australia is heavily dependent on foreign capital.

As global financial markets brace for emissions cuts, any limited access to foreign funds will increase borrowing costs, affecting interest rates on real estate and commercial loans and the financial viability of large infrastructure projects, will say. he does.

Morrison, who is currently in the United States for a Quad meeting, with climate policy on the agenda, said Thursday that no formal decision had been made on a net zero target.

“We will think more about my return to Australia,” he told Washington.

($ 1 = AU $ 1.3716)

Report by Renju José; edited by Richard Pullin

Our standards: Thomson Reuters Trust Principles.


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