A carbon neutral future is taking shape in Asia, and Australia needs to catch up

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Australia’s annual Climate of the Nation report, which surveys 2,000 voters and has been running for 13 years, on Wednesday found that 80% of respondents believe the country is already experiencing the impacts of climate change.

The number of Australians saying their country is experiencing climate change has risen 15 percentage points over the past five years, according to the survey. That’s none too surprising: Australia has endured severe droughts, blazing wildfires and massive coral bleaching in that time.

The same survey found 59% of respondents want to see renewable energy play a bigger role in the country’s post-pandemic recovery, but last month Canberra rolled out a raft of recovery policies that support growth in gas and other fossil fuels.

Prime Minister Scott Morrison has resisted international calls for Australia to commit to a climate change strategy and set a deadline for decarbonizing the economy. The heavily polluting mining industry—producing both ores and coal—is a major contributor to the Australian economy. But, increasingly, Australia’s trade partners are committing to net zero initiatives.

On Monday, Japan Prime Minister Yoshihide Suga pledged the country would become carbon neutral by 2050. The move had been anticipated since last week. But, more surprisingly, South Korea President Moon Jae-in followed suit on Wednesday and committed his country to carbon neutrality by 2050.

There are few details to Moon’s plan, but the President said that coal power will eventually be replaced entirely by renewable energy, which currently only accounts for 5% of the nation’s electricity generation.

The actions of Australia trade partners—South Korea, Japan and China, which pledged to go carbon neutral by 2060 last month—will force Canberra to plan for a less carbon-intensive future whether it wants to or not. The three countries are Australia’s largest markets for exports of thermal coal and their shift to net zero will leave a hole in demand.

Australia’s financial institutions are already responding. The last of the Big Four banks pledged to stop funding thermal coal projects this week, as the potential returns dimmish.

In the words of Prime Minister Suga, as he announced Japan’s plan to become carbon neutral, “Responding to climate change is no longer a constraint on economic growth.” But, as Canberra will learn, not responding soon enough will cost dearly.

More below.

Eamon Barrett
eamon.barrett@fortune.com

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