Can we afford to reduce emissions?
Reducing emissions will not significantly impact the Australian economy
Australian Treasury modeling in 2008 estimated that the cost to households of Australia committing to emissions reductions of 25% by 2020 would be around an additional $1 a day (with household income expected to continue to grow strongly).
So for a dollar a day, Australians can have a real impact on climate change.
Recent Australian economic reports by the Allen Consulting Group, (Deep Cuts in Greenhouse Gas Emissions - Economic, social and environmental impacts for Australia) and the CSIRO's/Monash University’s Beyond the Double Dividend indicate that making deep cuts to our greenhouse gas emissions will have a very small impact on Australia's economic growth.
These reports indicate that Australia's emissions can be reduced by 60% by 2050 while Gross Domestic Product continues to grow at an annual rate of just above 2%. The cost of reducing emissions is expected to reduce growth by only 0.1% per year.
The cost of reducing emissions is expected to reduce growth by only 0.1% per year.
But delaying action to reduce emissions will hurt the economy
The Allen Consulting Group's report, Deep Cuts in Greenhouse Gas Emissions - Economic, social and environmental impacts for Australia, indicates that delaying action on climate change would be significantly more expensive than acting now.
The report indicates that if we delay action Australia's economic growth would be reduced by 0.3% a year (as opposed to 0.1% a year if we act now).
The Stern Review: The Economics of Climate Change takes a global perspective. It found that the benefits of strong early action considerably outweigh the costs. And the earlier effective action is taken, the les costly it will be.
Failure to reduce emissions at all will result in serious long-term economic costs
The Garnaut Climate Change Review in 2008 highlighted that Australia has a larger interest in tackling climate change than other developed nations. Australia as an already hot and dry continent is particularly vulnerable to small changes in climate.
In 2006 the Stern Review on the Economics of Climate Change concluded that the cost of climate change impacts under a "business-as-usual" scenario would be equivalent to a reduction in global per capita consumption of between 5% and 20%.
CSIRO's Energy Futures Forum report The Heat is On reported that the cost of not addressing climate change would reduce global Gross Domestic Product by between 4% and 16%. It is essential to act on climate change to avoid serious long-term economic impacts.
The cost of your energy bill will drop as a proportion of household income
Economic research has shown that while energy prices will increase under efforts to reduce climate change, the total cost of energy will represent a smaller proportion of household income, dropping from 7% in 2005 to 6% in 2050.
The Heat is On shows that overall household energy will be more affordable in 2050 than they are today.
