Property and personal finance reporter
Australia risks yearly economic losses on par with the pandemic by 2050 unless the country ramps up its fight on the “existential threat of climate change”.
Not only would the cost of inaction devastate Australia’s bottom line, but a new report has estimated nearly 900,000 jobs will be shed from at-risk industries within 50 years under a business-as-usual approach.
Deloitte Access Economics’ report, called A new choice: Australia’s climate for growth, found Australia is primed for an economic contraction of 6 per cent and $3.4 trillion in lost GDP by 2070 if the worsening effects of climate change remain unchecked.
The research paper contends farmers, manufacturers, miners and tourism businesses will be on the front line of an estimated 880,000 job losses unless global warming is restrained to 1.5 degrees Celsius by 2050.
Queensland would contribute more than half those losses (470,000, or 7 per cent of the state’s workforce) and endure a 14 per cent dip in gross state product (GSP) due to its exposure to high temperatures, high-emitting industries and export sectors.
Other jurisdictions including the Northern Territory (12 per cent lost GSP, 18,000 job losses) and Western Australia (9 per cent lost GSP, 110,000 job losses) would also be ravaged by heat stress and less demand for fossil fuels.
However, it’s not all doom and gloom – but only if politicians change tack under a model proposed by Deloitte’s economists.
A ‘new growth recovery’ – including a net-zero emissions target by 2050, upgrading electricity infrastructure and renewables innovation boosted by government and private investment – would create a $680 billion economic dividend.
That proposed model would expand the economy by 2.6 per cent and generate 250,000 new jobs by 2070, Deloitte said.
Chief economist at Deloitte Australia Chris Richardson said the report is an “urgent wake-up call” for policymakers to fast-track Australia’s shift to an emissions-neutral economy, with each passing year exacerbating the damage on local businesses and the environment.
With nearly a quarter of employed workers sitting in industries exposed to the dangers of an unplanned transition to renewables, the stakes are high, he said.
“The benefits of acting are huge. But we are fast running out of opportunity,” Mr Richardson said.
“The best and most effective way to tackle climate change is through market mechanisms. Australians need policy and regulatory reform that modernises our economy and unleashes business investment.”
Deloitte’s research follows a week of net-zero emissions commitments by economic powerhouses including Japan and South Korea, which have reignited pressure on the federal government to establish a firm deadline on its emissions target.
Meanwhile, a report by centre-right think tank the Blueprint Institute – which has links to former Liberal frontbencher Christopher Pyne – found Australia’s sluggishness on decarbonisation risks hurting international trade relations.
And British Prime Minister Boris Johnson also urged Prime Minister Scott Morrison last week during a phone call to pursue “ambitious targets” to reach net-zero emissions.
Principal report author and Deloitte Access Economics lead partner Dr Pradeep Philip said although the numbers were “sobering”, pursuing a new pathway sooner would reduce the pain for future generations.
“Yes, there’ll be costs. And there’ll be some losers. But we’ll all be losers if we fail to act,” Dr Philip said.
“Whatever Australia does or doesn’t do, the global warming which has already taken place will hurt our lives and livelihoods. This cost is locked in – it is the cost of delay,” Dr Philip said.
“This tells us that there is isn’t a ‘no cost’ option. So if we could take action today to prevent the next great recession from climate change, why wouldn’t we?”
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