Managing transition risks in fossil fuel-exporting nations
Risks to Australia’s incumbent fossil fuel production and export sector include asset stranding in the private sector (reserves and equipment), and of public infrastructure. Scenarios which are consistent with the Paris Agreement potentially see these risks being realized during the next two decades. This also brings significant potential for major socio-economic disruption to result from such speed of divestment. Researchers are exploring opportunities for state-private sector collaboration to accelerate the pace of business reinvention across the value chain to neutralize the impacts of closures. The research also highlights major challenges for states around structural interventions that would achieve permanent asset closures rather than mothballing, or sale to private and foreign investors that may not be aligned with the Paris Agreement.