According to Deloitte Access Economics, the economic cost of not addressing climate change will be a decline of Australia’s GDP by 6 per cent in present value terms.
“Losses of this magnitude far surpass the devasting economic consequences we are all feeling today from the impacts of COVID,” Deloitte warned.
“By 2055, Australia will experience economic losses on par with COVID due to unchecked climate change.”
In addition, the economic damage will cost the economy 880,000 jobs by 2070, noting that those losses will be experienced by people in their 20s, 30s and 40s today.
“For a generation of Australians, their economic futures, and that of their families and friends, will be profoundly disrupted by the consequences of unchecked climate change,” Deloitte warned.
“But the effects of this will not be uniform across Australia.”
Nationally, Deloitte predicted that the worst impacted industries would be service sectors (both government and business), trade and tourism, manufacturing, and mining, owing to their economic structure and the distribution of the impacts of the physical climate damages over time.
But, according to Deloitte, if Australia chooses to work towards a net zero emissions target, the economy has the potential to expand by $680 billion, or 2.6 per cent of GDP, in present value terms, adding over 250,000 jobs by 2070.
While noting that it would cost $67 billion to transform the economy to reduce emissions to reach net zero by 2050, Deloitte judged that this cost is a small price to pay relative to the size of the Australian economy.
“In dollar terms, for comparison, the current JobKeeper program is costing the federal budget just over $65 billion this year alone — and this is the necessary price Australia is paying to minimise the worst economic consequences of COVID,” the report said.
“If we could spend today to prevent the next great recession from climate change, why wouldn’t we?”
