Reducing the country’s emissions to zero by 2050 in alignment with our Paris Climate Agreement goals would see an economic windfall of over $35 billion a year, a new report released by the University of Melbourne has found.
By stark contrast, maintaining the status quo, and thereby setting a trajectory to a four-degree increase in global temperatures by 2011, would cost the economy $762 billion by 2050, blowing out to over $5 trillion by the start of the next decade.
The University of Melbourne’s Tom Kompas, one of the report’s lead authors, said that the costs of emissions reduction are miniscule relative to the damage of inaction.
“Our work shows that meeting the Paris target of a 26 per cent reduction in emissions by 2030 would result in a 0.14 per cent fall in Australia’s cumulative GDP from 2019 to 2030 of $35.5 billion,” Professor Kompas said.
“On the other hand, the potential damages from climate change over the same period with current global and Australian policy would result in more than $584 billion in losses from infrastructure damage and losses in agricultural and labour productivity.”
The report details how transitioning to a clear economy has a number of societal, environmental and direct economic benefits, with an estimated $549 billion being saved if we rapidly move to decarbonise in the coming decade.
Co-author Ellen Witte from SGS Economics and Planning said transitioning to a low-carbon economy “makes complete sense”.
“It helps curb emissions, but it also helps Australia compete globally – which may surprise some people. Global investors are increasingly looking to invest in renewables over fossil fuels. Exceptional latent opportunities for renewables exist in Australia and they are seen as a low-risk investment.
“Governments and businesses can drive the transition to a low carbon economy by managing climate-related financial risks and prioritising renewable energy generation, transport electrification and sector-specific options for agriculture and transport,” Ms Witte said.