As small businesses across Sydney count the cost of yet another flood disaster, Treasurer Jim Chalmers has confirmed the nation’s top economic department will resume its modelling of the risks posed by climate change.
The Sydney Morning Herald reports the Treasury has resumed its investigation of the physical and economic risks linked to climate change, almost a decade after the Coalition government minimised the department’s oversight of climate-related issues.
Speaking to the paper, Chalmers said work is already underway to “rebuild this capacity” as the Labor government forges ahead with its 43% emissions reduction plan.
Such modelling is likely to have a direct bearing on Australia’s economic and fiscal plans, in contrast to prior iterations of the national climate roadmap.
Get daily business news.
The latest stories, funding information, and expert advice. Free to sign up.
While the Reserve Bank of Australia now models how unchecked climate change could impact Australia’s financial system, and APRA has directly warned lenders to take stock of the potential risks, the nation’s 2021 climate pledge was largely built on modelling by external consultants.
The “Australian Way” plan put forward by the Morrison government was widely panned as an inadequate response to the challenge at hand, and also did little to estimate the cost to the Australian economy of insufficient action to reduce greenhouse gas emissions.
In-house climate modelling will provide a more accurate read of how climate change and government inaction could impact the Australian economy, Chalmers claimed.
The new modelling “will help us chart a path that maximises jobs and opportunities for our country as we take advantage of this transformation”, he said.
News of Treasury’s updated remit comes at a time of intense focus on climate change and its deleterious effects on local traders.
Climate change emerged as a prominent issue for small businesses ahead of the 2022 federal election, with voters ultimately ushering in a wave of ‘teal’ independent candidates who offered a climate-forward alternative to both the Coalition and Labor.
Their concerns were exacerbated by disastrous flooding across northern New South Wales and south-east Queensland in March and April.
Insurers estimate the disaster is the third-costliest in Australian history, and countless small business are still paying the cost for damaged property, power outages, and lost trade.
Another bout of flooding in Sydney in early July prompted the federal and NSW governments to activate another round of disaster funding for hard-hit regions.