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.
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. But the effects of this will not be uniform across Australia,” the report said.
However, Deloitte said the good news is that working towards a net zero emissions target will grow Australia’s economy by $680 billion, or 2.6 per cent of GDP, in present value terms and add over 250,000 jobs to the Australian economy by 2070.
The report noted it would cost $67 billion to transform the economy to reduce emissions to reach net zero by 2050. Deloitte noted the 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?”
Further, Deloitte said that the reality for Australia is that it stands to lose the most from unanswered climate change, but it also stands to gain significantly from action.
“When policy action and investments are delayed while we wait for the world to change around us — and the global temperature goal remains — the world will change, and Australia’s inevitable transformation to keep up will cost more as we will need to do more with less time,” the report said.
“For a middling diplomatic and economic power, Australia has every incentive to drive the global agenda for the national interest.”