Climate change could reduce Australia’s economic growth by 3% per year and cost about 310,000 jobs annually if left unchecked, according to Deloitte Access Economics.
A business-as-usual recovery strategy to the pandemic would cause severe economic disruption if it does not account for the impacts of a warming environment, according to a report by Deloitte published Monday.
“By 2050 Australia will experience economic losses on par with COVID every single year if we don’t address climate change,” said the report’s author Dr Pradeep Philip.
“That would compromise the economic future of all future generations of Australians,” said Philip, who is also a lead partner at Deloitte.
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Taking into account the damage caused by global warming and the cost of not acting, the report says Australia is forecast to lose about 880,000 jobs and $3.4 trillion dollars over the next 50 years.
However, if the government and private sector address climate change in the post-pandemic recovery, a much different outcome is expected.
Sustainable economic recovery could boost the national economy by about $680 billion and create over 250,000 jobs over the next five decades.
Growth could be achieved by transforming the energy and technology sectors to drive down emissions and create more jobs.
While no state wants to be the hardest hit, the level of disruption caused by climate change will vary across the country.
North-western Australia is most at risk because of its geography and dependence on agriculture, coal mining and oil and gas extraction industries.
“Australia’s farmers, builders, manufacturers, miners and tourism-related businesses are in the front line of the risks of climate change as the world responds,” said Philip.
Key industries set to experience the most disruption, should climate change go unmitigated are:
- Primary sectors — agriculture and resources;
- Secondary — energy and utilities, manufacturing, transport, construction; and
- Tertiary sectors — tourism, education, health care and other services.
The report demands business, industry and government to achieve economy-wide strategies to reach net-zero emissions by 2050.
Most global economies aim to reach net-zero emissions by 2050 to limit the global average warming to 1.5°C or above pre-industrial levels.
However, the Australian government has so far avoided setting a date for net-zero emissions.
“Climate change is no longer a possibility. It is a reality,” said Philip.
Doing nothing is now a policy choice, and it is costly.”