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Deloitte: Australia will lose trillions if we don't deal with local weather change

Guest essay by Eric Worrall

Deloitte said $ 3.4 trillion and 880,000 jobs were lost if we kept working as usual, but won $ 680 billion and 250,000 new jobs if we tackled climate change. However, some of their assumptions about normal business operations seem unrealistically pessimistic.

Australia will lose more than $ 3 trillion and 880,000 jobs in 50 years if climate change is not addressed, says Deloitte

By Kathleen Calderwood
Posted 1d ago, Updated at 6:19 am yesterday

If climate change is not addressed, the Australian economy will lose more than $ 3 trillion in the next 50 years, according to a new report from Deloitte Access Economics.

According to the report, the economy could contract 6 percent and 880,000 jobs could be lost over the next 50 years.

Report author Pradeep Philip, who served as political director for former Prime Minister Kevin Rudd, said there would also be much to be gained by keeping warming below 1.5 degrees and Australia zero net carbon emissions by 2050 would achieve.

"If we act in the next few years, the economy will have an advantage of $ 680 billion in just 50 years," he said.

"We will have a 2.6 percent bigger economy that will create 250,000 jobs. So if you are for growth and jobs, we need to tackle climate change now."

"We know that there are new sectors around renewable energy, hydrogen and electric vehicles that can be created."

Read more: https://www.abc.net.au/news/2020-11-02/australian-economy-lose-$3-trillion-climate-change-inaction/12837244

An example of a pessimistic assumption is the section on agriculture on page 33 of the report.

What and how we grow

Agricultural damage from different crop yields

• The agricultural sector is at the forefront of climate change in Australia. Due to the vast and variable geography of Australia, one part of the country can suffer the worst drought in living memory while other parts are hit by devastating floods.

• Climate change means rising temperatures, higher carbon dioxide (CO2) concentrations in the atmosphere and different regional precipitation patterns.

• For agricultural production, this means fluctuations in growth conditions, water availability and the severity and frequency of extreme weather events. This leads to volatility in crop yields and market uncertainty.

In view of the unchecked climate change, there are limits to what farmers can do despite adaptation. Deloitte Access Economics taken into account Damage to agriculture as fluctuations in crop yields be a significant impact.

Report available here (p. 33)

If we leave aside the obvious question of how fragile the renewable energy infrastructure is going to survive such a surge in superstorms, we can remove the disbelief and imagine for a moment that this terrible prediction will come true.

How would Australia adapt to such a future?

Australia has had a plan for nearly a century to significantly increase water availability on the drawing board. The most recent incarnation, proposed by the CSIRO in 2018, involves the construction of three mega-dams in the far north to develop huge tropical river systems that currently channel billions of liters of freshwater into the sea.

The CSIRO proposal calls for the dams to irrigate the local area in the tropics. However, if climate change makes agriculture impossible in the north, that water could instead be transported south under the tropical storm belt to irrigate new farms in Australia's vast southern desert. This would make any climate-induced increase in cyclones and severe storms an agricultural assetby filling the dams of the tropical zone with enough water to feed thirsty, cold-climate farms in the extreme south.

Or take the report's claim about lost labor productivity.

How workers work

Heat stress affects labor productivity

• As temperatures rise, worker exposure to heat becomes a problem for workers' health and safety and their ability to perform tasks.

• There is only so much heat stress that the body can endure.

• Before serious health consequences are reached (heat stress / stroke
or death), with lower exposure to heat, employees are exposed to reduced intellectual ability to work, reduced ability to work at their previous level and a higher risk of accidents.

Deloitte Access Economics sees the "slowdown" of workers and their ability to do their jobs as a result lower labor productivity.

Report available here (p. 31)

Does anyone seriously believe that by 2070 someone will have to work outdoors or even indoors in uncomfortable conditions? Or is it more likely that robots do most of the awkward manual work that humans currently do? Even if people still have to take part in outdoor work in 2070, agricultural machines are already being manufactured with air-conditioned cabins. For people who need to work outdoors, you can buy a cooling suit that you can fill with ice packs. The only reason these innovations are not being used more often is that most people don't need them. For most people, it is easier to drink water and sweat a little than preparing your ice pack suit every day before work.

The other point the report highlights is that the demand for Australian coal will decline. In all fairness, the state of the Australian coal market is not really the problem for Australian taxpayers. When the demand for coal falls, investment shifts to more profitable companies. When there is a demand for green hydrogen, investors will gather to seize the opportunity. This is how free market capitalism works. There is no need for government intervention if the investment opportunity is real.

Climate reports like Deloitte don't make sense in my opinion, even if you accept their climate predictions at face value. Even if global temperature rises as it predicts, which seems incredibly unlikely given the ongoing lack of rising temperatures, only the most pitiful pessimistic assumptions, such as the assumption that our descendants all forget how to innovate, can consider climate change as pose a significant problem.

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