With all the noise from the Coalition demanding to know the costs of action on climate change, (a tried-and-true hip pocket scare campaign for the past 30 years), it’s time to ask: what is the cost of inaction?
The Australia Institute has crunched some numbers and come up with the economic analysis that’s been missing, looking at the costs of inaction, and also setting some record straight.
UNLESS NATIONAL ACTION is taken to meet the Paris Target to limit global warming to less than 2 degrees, Australia’s GDP faces a hit of an average of $130 billion per year.
CAPTION: Overlayed graph plots the rise of Australia’s air temperature since 1910 (Source: Bureau of Meteorology). Background image Koorabri bushfire, January 2013. The District Bulletin reported in its February 2013 issue — “ ‘Hot as blazes’ with high winds and ‘catastrophic’ fire conditions were forecast for Palerang, Queanbeyan and other parts of south-east NSW in early January … In neighbouring Yass region conditions were out of control for longer, graziers lost their farm infrastructure and fodder and stock deaths were horrendous, reportedly some 10,000 sheep and cattle died in that fire and more were euthanased afterwards.”
The analysis shows that the current climate debate is largely missing three key points:
- The cost of inaction on climate change is huge — Australia’s GDP would average $130 billion per year lower if the Paris Agreement is not achieved according to a prominent study.
- Under the carbon price period, Australia successfully reduced emissions by 2% while the economy grew by 5%.
- Economic literature suggests the economic impacts of climate policy will be minor.
“As an economist, it is hard to understand why policymakers are ignoring Australia’s own recent history in climate policy and the clear costs imposed by climate change,” said Rod Campbell, Research Director at The Australia Institute.
“Australians have seen firsthand how emissions reduction and economic growth are possible at the same time — as a nation Australia experienced this very phenomenon five years ago.
“For political leaders to suggest we now need economic modelling to tell us whether this is indeed possible after all is a furphy.
“In just two years Australia reduced emissions by 2% and grew the economy by 5% under a carbon price and the sky did not fall in. In fact, employment grew by 200,000 jobs.
“Analysts cannot claim to base their work on the likes of Lord Nicholas Stern or Professor Joseph Stiglitz and then ignore the conclusions drawn by those very same pieces of research.
“Nicholas Stern’s own conclusion was that “the benefits of strong and early action far outweigh the economic costs of not acting [on climate change].”
“Analysis that ignores the economic benefits of acting on climate and only focuses on costs is misleading and does a disservice to this year’s voters and future generations.”