Climate change impacts and rising sea levels could cost the Australian economy $100 billion each year within the next two decades, according to a new report.
A white paper from the Climate Council has stated the cost of climate-fuelled extreme weather in Australia has almost doubled since the 1970s, totalling $35 billion during the past decade.
By 2038, extreme weather events alongside the impacts of a higher sea level are estimated to cost the Australian economy $100 billion every year.
A coalition of central banks, including the RBA, also warned last year that climate inaction could lead to around a quarter or more of global GDP being shed by 2100.
Globally, the last decade has been the costliest in terms of weather catastrophes. As recorded in the Climate Council report, climate-fuelled disasters were estimated to have caused US$210 billion ($272 billion) in economic losses in 2020.
Following the California fires, the US suffered US$95 billion ($123 billion) in recorded losses in the past year, while China’s floods contributed to its losses of US$32 billion ($42 billion).
But Australia faced particularly heavy costs compared to other countries during the last 10 years. On a per-capita basis, economic damages from extreme weather in Australia were around seven times the global average – slightly lower than the US, but significantly higher than for other developed countries such as New Zealand, Canada, the UK and the European average.
Heatwaves greatest health risk for Aussies
At the end of the century, annual fatalities from extreme heat worldwide are expected to outstrip all COVID-19-related deaths recorded in 2020.
The estimate from the US-based National Bureau of Economic Research has projected that if no climate action is taken, on average there could be 221 additional deaths per 100,000 people globally each year by 2100.
But even after factoring in efforts to adapt to a changing climate, the study estimated there would still be an extra 73 deaths per 100,000 people annually – which is greater than the number of people who died from COVID in 2020.
“Heatwaves are by far the most lethal extreme weather risk facing Australians,” the report stated.
The danger of extreme heat could exacerbate existing socio-economic inequalities, the Climate Council noted, pointing to extreme heat in western Sydney. On 4 January 2020, western Sydney suburb Penrith became the hottest place on Earth, at 48.9 degrees Celsius.
Climate change could broaden the divide between Sydney’s more affluent eastern suburbs against the fast-growing western suburbs, with the west experiencing six times as many days over 35 degrees Celsius in the 2019/20 summer. The extreme heat endangers children and their ability to study in schools, as well as the elderly and people with health conditions.
Australians are five times more likely to be displaced by a climate-fuelled disaster than someone living in Europe, the Climate Council has warned. In the Pacific, the risk is 100 times higher.
Aus economy could pivot or cop losses
The report has also warned that no developed country has more to lose from climate change-related extreme weather, or more to gain, than Australia does, as the world seems set to transition into a zero-carbon economy.
Currently, the nation is the world’s third-largest exporter of fossil fuels, behind only Russia and Saudi Arabia.
“Renewable energy is already cheaper than fossil fuels, employs more people – particularly in regional Australia – and can be rapidly expanded,” the Climate Council report stated.
“Renewable hydrogen and other emerging technologies provide Australia with an opportunity to build a world-leading renewable export industry, setting up economic prosperity for generations to come,” it later read.
“Yet despite our enviable natural advantages, Australia currently risks being left behind.”
The Intergovernmental Panel on Climate Change (IPCC) has also projected that even if the global temperature rise is held to 1.5 degrees Celsius, coral reefs will decline by a further 70-90 per cent. At 2 degrees Celsius, tropical reef-building corals are expected to mostly disappear, with the loss of more than 99 per cent of corals.
The price of the coral losses has been projected to be $6 billion for the Australian economy, along with the 64,000 jobs it supports.
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].
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