Debate about the cost of climate action is a recurring feature of Australian politics and has been central to the political turmoil of the last decade. Advocates for delaying or limiting climate action often point to modelling that claims to show the costs of action are very high.
Australia’s current climate targets, of 26% below 2005 levels by 2030, are inadequate and leave Australians exposed to large costs from increasing climate change. In the Paris Agreement, Australia agreed current targets were too low and must be increased. According to the Climate Change Authority, Australia’s targets should be at least 45% by 2030 to be in line with the Paris Agreement.
The Government says that ambitious targets (greater than 26%) would be “economy wrecking”, adopting this rhetoric from the Business Council of Australia (BCA). The Government has also seized on new modelling from economist Brian Fisher, who claims lower emissions would have a very high cost for Australia. Media commentators called the impacts “apocalyptic”.
These claims are outliers and not credible. The extensive literature on the cost of action contradicts claims from the BCA, Brian Fisher and the government. Higher ambition is possible with low to negligible economic impact.
This report examines 22 reports modelling higher ambition emission reductions by 2030.
19 reports are from the last five years alone, in peer reviewed journals, and from academics, government agencies and consultants. This report also considers the three major Treasury reports from 2008 to 2013.
10 of the reports consider economy wide impacts. 12 reports look exclusively at electricity, including 5 modelling 100% renewable energy.
None of these reports show action on climate change is ‘economy wrecking’. All of them show the cost is very small compared to ongoing economic growth. Some reports show positive benefits from action, even without considering avoided climate change.