This paper argues that food price rises under an ETS would be modest, while extreme weather events from climate change will pose a much larger risk on food price stability.
Drought and other extreme weather events are already making life more difficult for many Australians, particularly those in rural and regional communities. The current drought and general drying trend in southern Australia are due, in part, to rising emissions levels. Carbon pollution and climate change is likely to assume a bigger role in drought in the future. Scientists predict a striking increase in the severity, frequency and extent of extreme drought in the continent’s southeast, where most of our food is produced.
Left unchecked, climate change will raise food prices significantly higher – far higher than industry’s speculations as regards the CPRS. Even with stronger climate action – a higher carbon price, say, to reach an 90% cut in emissions by 2050 – the weekly grocery basket is likely to remain affordable.
In fact, while we can only guess at the price impact of a more volatile climate, the effects of emissions trading are reasonably foreseeable, so governments can (and should) ensure the most vulnerable in society are no worse off.