Prominent economist Saul Eslake believes ditching the proposed Adani coal mine in Queensland won't hurt Australia's credit rating.
Mr Eslake's new report - commissioned by the Australian Conservation Foundation - found no evidence that stopping the project on environmental grounds would hurt Australia's ability to attract foreign investment.
"There is absolutely no reason to think that Australia's sovereign credit rating would be in any way affected if a future Australian government were to prevent the Adani Carmichael coal mine from going ahead on environmental grounds," Mr Eslake writes.
Labor opposes the mine, but federal leader Bill Shorten has vowed not to tear up approvals if he won the next election to avoid reducing foreign investment in Australia.
The government claims Mr Shorten's opposition to the project will hurt jobs and investment.
ACF chief executive Kelly O'Shanassy said the report removed the only remaining objection to the government stopping the construction of the mine.
"Attempts to justify Adani's dirty Carmichael mine are falling like dominoes and the threats are crystal clear," Ms O'Shanassy said in a statement.
