Climate change is a major threat to the environment globally. But while changes to sea levels might be hard to imagine, how climate change will hit your wallet is already a reality.
The Coalition didn’t have strong policies on climate change, with its major act being to dedicate $2 billion to the Climate Solutions Fund aimed at helping farmers, small businesses and Indigenous communities reduce their emissions and lower energy costs.
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It also planned to back the construction of a second undersea power interconnector aimed at bringing more hydroelectric power generated in Tasmania into the mainland.
However, the Climate Council’s report on the compound costs of climate change has revealed some staggering figures on how Australia’s economy will be affected by climate change, including how the property market will cop a $571 billion hit in value by 2030.
Here’s how climate change is costing households:
Property values will drop
Climate change and extreme weather are projected to reduce property values by $571 billion by 2030, $611 billion by 2050 and a whopping $770 billion by 2100.
According to the report, those costs are likely to be highly concentrated on around 5 to 6 per cent of properties, and would represent an enormous cost for those affected, which will be around one in every 19 property owners.
The average risk costs of extreme weather and climate change to properties is projected to rise to $91 billion per year in 2050, and $117 billion per year in 2100, which will be felt through increased insurance costs that will be “effectively unaffordable”.
Those insurance premiums would mean those with a home worth $500,000 will have to set aside over $5,000 (1 per cent) per year for the extreme weather losses for the building alone.
On top of that, more than $226 billion in commercial, industrial, road, rail and residential assets will be at risk from sea level rise alone by 2100, if greenhouse gasses continue at high levels.
Agriculture and food production will slow
Climate change is increasing the severity and intensity of extreme weather events in Australia, and the accumulated loss of wealth due to reduced agricultural and labour productivity is expected to exceed $19 billion by 2030, $211 billion by 2050 and $4 trillion by 2100.
By 2050, climate change is projected to halve the irrigated agricultural output of the Murray-Darling Basin region, which currently accounts for 50 per cent of Australia’s irrigated agricultural output by value.
By 2090, wheat yields on the 4,200 family farms in WA (which produce half of Australia’s wheat) are projected to fall by almost 50 per cent.
What else could happen?
Decreased food yields would lead to decreased farm incomes, which would mean job losses and decreased retail activity in rural areas and debt.
The flow-on from that?
Increased economic pressure, depression, increased health costs, inflation and regional political instability.
Independent.co.uk also reported rising travel insurance costs could also follow, and it could be within the next five years.
Chris Rolland, CEO at specialist medical travel insurance provider AllClear, told the publication that climate change could increase future travel insurance costs, as policies are potentially required to provide more extensive cover.
“For example, with increased extreme weather incidents brought about by the effects of climate change, more people will realise the value of having ‘trip disruption’ cover for natural disasters,” he said.
Here’s a flow chart examining the impacts of climate change on the food system:
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