FACTORING CLIMATE AND ENVIRONMENT INTO ECONOMIC DEVELOPMENT DECISIONS
Nicki Hutley
There is no doubt that the pathway to achieving net zero emissions is steep and rocky , nor will it be even across regions , sectors , or communities either within Australia or indeed globally .
However , one equation that urges us to faster , stronger action is that the costs of inaction far outweigh the costs of action , conservatively by a factor of at least ten to one and possibly as much as twenty to one . 1
The Federal Government ’ s latest Intergenerational Report ( IGR ) 2 , released in September 2023 , raised many of the economic challenges of failing to deal with climate change , although it failed to quantify most of these impacts other than potential heat effects on productivity in some sectors .
Failure to implement policies leading to greater emissions reduction , both here and globally , will lead us to global heating of at least 2.5 ° C , and possibly as much as 4.1 ° C by 2100 . 3 While that date may seem far away , every additional tonne of carbon dioxide ( or other Greenhouse Gas , or GHG ) put into the atmosphere comes with a huge price tag in terms of economic damages .
The modelled costs of such failure are difficult to get one ’ s head around . They include not only damages to physical
assets and loss of life , but also health costs ( which are some of the largest costs ) such as increased hospital admissions due to excessive heat and smoke inhalation and increases in water-borne diseases from flooding . Add to this the loss of labour and agricultural productivity , and disruption to economic activity during “ extreme ” events , as well as long term sectoral damage such as to tourism from rising average temperatures and coral bleaching .
Costs that are more difficult to capture in traditional economic models include loss of well-being including through heightened anxiety , increases in domestic and family violence , increased use of alcohol and other drugs , poorer mental health , and forced migration . We are already seeing the latter in regions such as Queensland ’ s Lockyer Valley and NSW ’ s Northern Rivers , but this is also a global phenomenon affecting our Pacific Island neighbours in particular .
Such concepts can make one want to bury our heads in the sand , especially when we consider the large task of transition ahead . However , our approach should be to embrace climate mitigation in every way possible – as well as adaptation to those impacts we can ’ t avoid . This means embedding climate considerations across every sector : energy is front and foremost , of course , but industry , transport , agriculture , and the built and natural environments also need consideration .
It ’ s worth mentioning that biodiversity and the natural environment more broadly are now becoming integrated into our conversations about climate action . For example , wind turbines have potential implications for bird migration pathways , but require far less land than solar panels for the equivalent amount of energy production . Trade-offs need to be considered with an economic approach including cost benefit analysis .
Importantly , those in charge of planning Australia ’ s Economic Development are well-placed to support climate action in ways that are optimal for their communities and Australia as a whole .
The following sections discuss how Economic Development Officers ( EDOs ) can and should be thinking about climate mitigation and adaption in their project and strategic planning .
VOL 16 NO 3 2023 16 www . edaustralia . com . au