Climate change could cost Australia about $1.8bn in crop losses alone within 30 years if drastic action isn’t taken, Treasurer Jim Chalmers has warned.
In a speech to the national drought forum in Rockhampton, Dr Chalmers unveiled the latest Treasury modelling which reveal the economic impact of inaction.
Dr Chalmers said that major events, such as the black summer bushfires and October 2022 floods, cost the economy about $1.5bn each and warned that without further action future events could grow to cost more.
“And the latest projections also show the significant impact that climate change could have on our regions,” Dr Chalmers said.
“If further action isn’t taken, Australia crop yields could be four per cent lower by 2063 – costing us about $1.8bn in GDP in today’s dollars.”
The latest modelling comes just a month after the intergenerational report forecasted climate change could, through lost productivity, cost the economy as much as $423bn by 2063 if the earth warms by more than two degrees.
That report forecasted impacts of crop yields and tourism would further burden the budget.
Dr Chalmers on Tuesday also pointed to a 433 per cent increase in just three years of Commonwealth funding under the Disaster Recovery Funding Arrangements.
“What was $335m in Commonwealth spending on disaster recovery in 2017-18, has become around $2.5bn in 2022-23,” he said.
“So, the pressure of a changing climate and more frequent natural disasters is constant, cascading, and cumulative.”
Dr Chalmers used his speech to highlight the importance of decarbonisation and a transition to net-zero through investing in clean energy.
Shadow treasurer Angus Taylor earlier did not question the modelling but said it highlighted the need for the government to consider “every possible lever” to get to net zero, including nuclear technology.
The government has maintained a firm no-nuclear stance, saying it is too expensive.
“This is a feasible technology, but it’s not the only technology,” Mr Taylor told ABC Radio.
“But why would you preclude options that could make this job easier.
“This is about a balance … of technologies that can deliver the three things you need in an energy system: affordability, reliability, and sustainability. All three matter … particularly when you’re in a cost of living crisis.”
Despite the Coalition having brokered a deal to support a transition to net-zero by 2050 when in government, internal discontent over the issue returned the forefront in recent weeks, after some Nationals members sought to strike the party’s commitment to net-zero from the national platform.
The bid was ultimately defeated.
Dr Chalmers told the forum the government was doing everything it could to help farmers and regional Australians not only “respond and prepare”, but also “find opportunities within the challenge”.
Dr Chalmers’ speech comes as 200 emergency management bodies and response and recovery agencies gather in Canberra for the second day of Australia’s first national disaster preparedness summit ahead of a dry El Nino summer.
Prime Minister Anthony Albanese will address the summit on Tuesday afternoon.