New research suggests Australia could phase out coal production without taking a massive economic hit.

A study commissioned by the left wing think-tank, the Australia Institute, says the Federal Government could impose a moratorium on new coal mines and oversee the managed winding down of existing ones.

If it did, according to the report from Victoria University's Centre of Policy Studies, it would bring just a 0.06 per cent hit to the Australian economy in 2040.

“The world outlook for coal is fairly bleak. We don't see much likelihood of strong market conditions for coal over the longer term,” research leader Professor Philip Adams told the ABC this week.

“Our modelling suggests that the impacts will not start for 10 to 15 years. There is enough coal in mines that are operating or will be operating to continue the level of exports that we see now.

“But, thereafter, coal production will slow as new mines which otherwise would come on are not allowed to come on.

“Is this a bad thing for Australia? The answer is no.”

While the report found that the overall impact may not be too severe, phasing out coal would smash regional areas that rely on the industry.

“The Fitzroy area in Queensland, the Hunter Valley in New South Wales will be significantly affected adversely by the slowing down in both demand and supply of coal production,” the report notes.

The World Coal Association says the black rock is not going anywhere.

Coal association chief Benjamin Sporton says 41 per cent of the world's electricity relies on coal, as does 90 per cent of Australia's eastern seaboard.

“To try and say we're going to move away from a fuel that provides that much of the world's electricity, I just don't think is realistic,” Mr Sporton said.

“Coal is going to play a big role in the world's economy and the world's electricity mix for decades to come and it's incredibly important that we focus on a role for low-emission coal technology.”