Australia’s 2019 election campaign has already seen a strong focus on the economic impacts of climate policy. Much of the content so far has missed three key points:
- Australia has recent experience of carbon pricing and emissions reduction, during a period of economic growth. Any analysis that projects significant economic impact from future emissions reduction policy must explain why there was no significant impact in the 2012-14 period.
- There is a considerable literature of economic analysis suggesting economic impacts of climate policy will be minor. Analysis forecasting major impacts cannot ignore this literature, or worse still, cherry pick parts of analyses that suits particular conclusions.
- Climate change itself imposes huge economic costs. In avoiding these costs, emissions reduction brings economic benefit. Analysis that excludes these benefits to only focus on costs is misleading.