Canberra tones down climate change economic impact

OREANDA-NEWS. The Australian government's latest report on economic and social trends over the next 40 years tones down the economic impact of climate change on the domestic economy, a contrast to the previous 2010 report when it was deemed a significant long-term economic risk.

The switch reflects the change in government with the conservative Liberal-National coalition led by prime minister Tony Abbott that has repealed the carbon tax and cut funding to initiatives to reduce greenhouse gas (GHG) emissions.

The report does acknowledge climate change, reaffirming that Australia will meet its UN Kyoto pact target for 2020 and will join with the international community to establish post-2020 targets with the aim of reducing GHG emissions. Australia is due to submit its post-2020 GHG emissions target by the end of next month. The coalition government's main vehicle to meet the 2020 target of a 4pc reduction on 1990 levels is through its A\$2.55bn (\$1.99bn) emissions reduction fund.

The latest report said some economic effects of climate change may be beneficial, where regions become warmer or wetter allowing for increased agricultural output. But other effects may be harmful, such as lower rainfall reducing crop yields, or transport infrastructure such as roads, ports and rail networks becoming more prone to damage from extreme weather events.

The 2015 report largely kept the effects of climate change to an environmental context. A significant future challenge will be the protection of the Great Barrier Reef from threats such climate change, it said.

The report is required every five years to focus on the implications of demographic change for economic growth and assess the financial implications of continuing current policies and trends over the next 40 years.