Australian finances take massive hit from climate change

The financial cost of extreme weather in Australia has more than doubled since the 1970s and, according to a new report, inaction on climate change is only going to cost Australians more money in the future.

In recent times, we have suffered through a crippling drought, continued mass bleaching of the Great Barrier Reef and the devastating Black Summer bushfires, all of which have served to highlight Australia’s vulnerability to climate impacts.

The Climate Council’s Hitting Home: The Compounding Costs of Climate Inaction report explains that extreme weather events in Australia have cost $35 billion over the past decade and Professor Will Steffen believes things will only get worse in the coming years.

“There is no doubt that we have entered an era of consequences arising from decades of climate inaction and delay,” Prof. Steffen explained.

“And it is going to get worse. By 2038, extreme weather events driven by climate change, as well as the impacts of sea-level rise, could cost the Australian economy $100 billion every year.

“Australians are five times more likely to be displaced by a climate change-fuelled disaster than someone living in Europe. In the Pacific, that risk is 100 times higher.

“No developed country has more to lose from climate change-fuelled extreme weather, or more to gain as the world transforms to a zero-carbon economy, than Australia does.”

According to the report, 2019-20 ushered in a new and dangerous era of megafires that ravaged not only Australia, but Brazil, Siberia and the US west coast.

Climate change hazards affected six times more people in the Asia-Pacific region than in the rest of the world combined, according to the data in the report, and current projections suggest that all of Australia’s and the world’s tropical coral reefs will be eliminated due to climate change.

The former United Nations secretary general’s special representative for disaster risk reduction, Dr Robert Glasser, said the financial impact of climate change on Australia would also come indirectly from our neighbours in the region, who are more acutely vulnerable to the effects of climate change. 

“The regional impacts of climate change will profoundly undermine Australia’s national security,” Dr Glasser explained.

“Unlike most other wealthy countries, Australia is in a region with many densely populated, near-neighbour developing countries that are highly vulnerable to climate change.

“Because many climate impacts are already locked-in, we must learn to live in a new era of drought, floods, and megafires,” he said.

“It’s equally clear that far greater dangers lie ahead if we fail to act with the urgency and determination that the science demands.”

The report explains that past inaction means current emissions targets do not go far enough to combat the effects of climate change and states that global emissions will need to halve over the coming decade with net zero emissions by 2040 at the latest.

Last year, the Natixis Global Retirement Index listed climate change as one of five issues that could present the greatest threat to retirement security.

According to the Natixis report, worsening air pollution poses greater health and safety risks for vulnerable retirees, including chronic cardiac and pulmonary illnesses.

It also explained that the financial impacts of climate-related disasters, including higher insurance costs and growing food expenditure, would hurt retirees in the coming years.

Are you worried about the financial implications of climate change on your retirement? Should the government be doing more to address climate change?

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Written by Ben Hocking

Ben Hocking is a skilled writer and editor with interests and expertise in politics, government, Centrelink, finance, health, retirement income, superannuation, Wordle and sports.

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