This report finds there are few forces affecting the Australian economy that can match the scale, persistence and systemic risk associated with climate change.
Australia’s financial regulators have recently made a call for action to deal with climate change, with the Reserve Bank of Australia, the Australian Prudential Regulation Authority and the Australian Securities and Investment Commission citing risks posed by climate change as a central concern for the economy and financial stability.
As the Deputy Governor of the Reserve Bank of Australia noted, the risks that climate change poses to the Australian economy are “ first order” and have knock-on implications for macroeconomic policy (Debelle 2019).
- Climate change is a major threat to Australia’s financial stability, and poses substantial systemic economic risks
- Detailed new modelling, based on the Federal Government’s current approach to climate change, finds that the economic damage to Australia’s property and agricultural sectors will be very significant
- The property market is expected to lose $571 billion in value by 2030 due to climate change and extreme weather, and will continue to lose value in the coming decades if emissions remain high
- Extreme events like droughts, heatwaves, cyclones and floods have an impact on agriculture and food production; this is already affecting Australia’s economy and will cost us much more in the future
- The severe costs of climate change outlined in this report are not inevitable. To avoid the costs of climate change increasing exponentially, greenhouse gas emissions must decline to net zero emissions before 2050. Investments in resilience and adaptation will be essential to reduce or prevent losses in the coming decades