Treasury to model climate change effects on economy

By Anna Macdonald

July 7, 2022

Jim Chalmers
Treasurer Jim Chalmers. (AAP Image/Joel Carrett)

The federal Treasury will once again look at the impact of climate change on the Australian economy.

In a statement shared with The Mandarin treasurer Jim Chalmers said work was already underway to restore the role of the Treasury department in modelling climate risks and opportunities for the Australian economy.

“Treasury’s modelling will help us chart a path that maximises jobs and opportunities for our country as we take advantage of this transformation,” Chalmers said.

“We’ll have more to say about this important work. Australia’s economic prospects will be in large part determined by our ability to take ambitious action on climate change and deliver cheaper and cleaner energy.”

As previously reported in The Age, Chalmers had asked the department to model how climate change was affecting the Australian economy.

The news comes as NSW is facing its fourth flooding event in 18 months, with disaster payments from the federal government set to open today at 2 pm. 

It has been nine years since the department last looked at the economic consequences of climate change, with climate change policy a key talking point for the recently elected Labor government.

Prime minister Anthony Albanese reiterated his government’s climate change commitment.

At a press conference yesterday, Albanese was questioned on his long-term solutions to climate change in relation to the flood situation in New South Wales. 

“We’ve said that we want to look at areas of disaster mitigation and that we’ll make that money available for projects each and every year, to make sure that we’re preparing for the changes in weather patterns and what that means for disasters,” Albanese said. 

After emphasising his commitment to infrastructure, the prime minister continued to state his government would be looking at climate change policies closely when parliament sits later this month. 

There have been attempts in the past to examine the cost of climate change, such as in 2019 by the Melbourne Sustainable Society Institute at the University of Melbourne.

Using that study, it was estimated the costs to reduce emissions by 2030 would be $35.5 billion to meet a 26% reduction in emissions. The costs under the 2019 policy were estimated to total $584.5 billion by 2030. 


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