The Government’s treatment of climate change in Thursday’s Intergenerational Report should come under close scrutiny. If you don’t have a plan for climate change, you don’t have a plan for the future. A sensible plan will lay out how we can help to avoid 2°C warming and include a decarbonisation pathway to phase down our greenhouse gas emissions to zero by mid-century.
These calls are now increasingly mainstream and being echoed around the world, but Australia’s political and business leaders have been slow to act.
The World Bank and OECD have highlighted the enormous economic and social costs of warming beyond 2°C and have called for a zero emissions global economy. Leading industrialists and CEOs are pushing for this to be achieved by 2050. The Bank of England is stepping up its examination of climate related systemic risk.
As CSIRO recently revealed, Australia is already feeling the effects and costs of climate change. These will grow markedly and place an increasing burden on our children and our way of life, as well as threaten economic growth and regional security.
In December 2013, the government committed to including climate change in the Intergenerational Report. To what extent this commitment is honoured will become clear on Thursday, when the 2015 Report is released.
The Climate Institute’s new Research Brief identifies five key elements that the Report should include to effectively address climate change:
- Projections of Australian emissions to 2055 under current policies.
- A carbon budget and emissions pathway to net zero emissions, consistent with Australia’s fair contribution to the internationally agreed goal to avoid 2°C of warming.
- Estimates of the economic cost of climate impacts and application of these in decision making.
- Estimates of the impacts and costs to Australia of potential climate change scenarios.
- Evaluation of risks of financial system contagion from climate-related impacts.
The Intergenerational Report should also consider the fiscal impact of alternative policies. Last year we estimated that repeal of carbon laws and the revenue from big emitters paying for carbon permits would have a fiscal impact of $18 billion by 2020. The Government’s current policy, which uses taxpayer funds to purchase emissions reduction, adds up to $2.55 billion to that impact in the next four years.
Broader fiscal considerations include the Commonwealth’s role as insurer-of-last-resort against intensifying extreme weather events, funding of large-scale adaptation to growing climate impacts in key sectors, management of the international and domestic transition to a zero-emission economy, and revenue implications of declining demand for high-carbon exports such as thermal coal.
Acting on climate change is in Australia’s national interest. Failure to plan thoroughly for the climate trends of coming decades would be an act not just of intergenerational theft but of intergenerational recklessness.
John Connor is the CEO of the Climate Institute