On Tuesday, Treasurer Joe Hockey  said the government had been in talks with Queensland state counterparts on Adani Group's proposed Carmichael coal mine.

The discussions focused on a 388-kilometre rail line the Indian mining company would build from its giant mine at Abbot Point near the Great Barrier Reef.

"One of the things they are looking at is how we can ensure that the railway line remains financially viable. I can't give away too many details, but we are working away at that," Mr Hockey told ABC radio on Monday.

While stressing it was not her role to criticise specific projects, Ms Hedegaard said Australia and other nations with large coal reserves - such as Germany - had agreed at the G20 and elsewhere to phase out subsidies for fossil fuels.

"It's not enough to say that we want to [cut subsidies]. We have to start doing it," Ms Hedegaard told Fairfax Media. "A good place would be not to have more subsidies for fossil fuels."

Globally, the world was providing $5 in subsidies for the fossil fuel industry for every dollar spent boosting renewable energy.

"We are subsidising carbon when we say we should go low carbon," she said. "It's not a wise strategy."

Australia is projected to subsidise coal, petroleum and gas consumption by $41 billion in 2015, the International Monetary Fund said last month. That is the equivalent of 2 per cent of Australia's annual economic output.

Fairfax Media understands the government has been considering the Adani mine for support under its $5 billion northern Australia infrastructure fund. The mine has struggled to attract financial backers as the global coal price has collapsed and opposition to developing a massive new coal province with significant new greenhouse gas emission potential has grown.

Ms Hedegaard, who is speaking on the politics of climate change in Sydney on Tuesday, said major instititutions such as the European Investment Bank would not longer support new coal projects.

"There is a trend not to invest in fossil fuels," she said. "You had better start investing in things other than coal."

Nations with a heavy dependence on fossil fuel subsidies, such as Indonesia and Egypt, could not be expected to switch them off overnight.

Still, nations such as Norway, which had grown rich on oil exports, were now looking for "new strongholds" of the economy suited for a lower carbon world. "The sooner you start to diversify ... the more smooth a transition you have," she said.

Ms Hedegaard was the Danish Climate and Energy Minister during the Copenhagen climate summit in 2009.

She declined to comment on whether the Abbott government's pledge ahead of this year's Paris climate to cut 2005-level emissions by 26-28 per cent by 2030 was enough.

However, Ms Hedegaard said success at Paris would be measured by whether nations had done enough to ensure global temperatures remained at less than 2 degrees of pre-industrial levels.

With nations likely to make only non-binding promises to cut emissions, there was likely to be a strong push to improve reporting and verification efforts at the French summit so nations at least make an effort to implement what they have pledged, she said.

With Lisa Cox