While political leaders in Australia debate the economic impact of going green, the actual costs of climate change are likely to be devastating, with a new report from the Climate Council revealing a lack of climate policy could lead to the loss of 50,000 jobs nationally and cost the country billions per year.
The report anticipates losses mounting as the years go on, with a predicted cost of $94 billion per year for Australia by 2060 and $129 billion per year by 2100.
Titled Markets are Moving: The Economic Cost of Australia’s Climate Inaction, the report was authored by climate councillor Nicki Hutley, a former partner at Deloitte Access Economics.
“The world is responding to the climate crisis and carbon border tariffs are now inevitable,” says Hutley.
“Australians will pay the price unless the federal government cuts our national carbon emissions in line with our major trading partners – and Queensland will be disproportionately affected.”
Alongside Queensland, the report identifies New South Wales as being one of the biggest losers with climate change worsening – due to the dominance of targeted exported goods like coal.
Identifying some of the key areas of concern like health costs, property damage and loss of productivity, the report argues that Australia’s "slow and weak national progress” on climate change has now cemented an economic downturn for future populations, while other countries have satisfactorily prepared themselves for greener opportunities.
Vital opportunities in the production of cleaner products have been squandered as Australia holds on to fossil fuels, according to the report. Countries like Sweden have taken the lead by providing green steel for Volvo, and Canada has made ambitious plans to become “world leaders” in the production of carbon-neutral cement.
The UK recently committed to net zero emissions by 2035 and the country has experienced significant growth in the green economy, currently estimated to be worth at least $400 billion. Growth in the sector is forecast to increase by 6.7 per cent per year over the five years to 2025-26.
Contrary to the famous claim in parliament from Prime Minister Scott Morrison that “coal won’t hurt you”, the loss of these opportunities - as well as carbon tariffs imposed by other countries - could very well damage our national economy.
The introduction of the European Union’s Carbon Border Adjustment Mechanism (CBAM) is among the first major initiatives to affect the nature of trading, and will almost certainly affect Australian GDP, according to the report.
Under a CBAM, importers to countries with a carbon price will need to pay a tariff depending on the carbon embedded in products, with a particular emphasis on the “direct emissions from iron, steel, cement, fertiliser, aluminium, and electricity”, as well as other resources to be applied in the future.
Following analysis from their climate and energy program, The Australia Institute has criticised PM Morrison for labelling these schemes as “protectionist”.
The Climate Council report predicts that we stand to lose over $4 billion if major trading partners like South Korea and China implement similar mechanisms, as well as a loss to the national income of $12.5 billion and several thousands of jobs. Both countries have recently committed to net zero emissions by 2050.
Though Australia is yet to seriously join the race to a cleaner economy in the way other countries have, Hutley is confident that we can pick up the slack and seize upon the opportunities still available. Modelling from Deloitte Access Economics suggests that moves toward a low carbon economy would add $680 billion in economic growth and 250,000 new jobs by 2070.
“We have the natural resources and the ingenuity to become a world leader in renewable energy, and in industries such as clean manufacturing, minerals processing and renewable hydrogen – bringing tens of thousands of jobs to the states and regions,” argues Hutley.
“As a first step, we should match our key trading partners and at least halve emissions by 2030. In line with the science, the Climate Council recommends a 75 per cent cut by 2030 on the way to zero by 2035.”
Perception of coal mining’s significance in Australia is largely disproportionate to the reality. Research from The Australia Institute showed that 12.6 per cent of GDP was perceived to be in coal mining, compared to the actual 2.5 per cent of GDP.
The report, which labels Australia as a “climate laggard”, comes as Federal Cabinet is due to meet today to discuss a net-zero target for 2050.
Further, Scott Morrison is currently preparing for the Glasgow Climate Conference in a few weeks, after a period of uncertainty as to whether he would, in fact, be attending.
Get our daily business news
Sign up to our free email news updates.
Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support