The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Wayne Swan

Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

1 February 2010

NO.010

Joint Media Release
with
Senator The Hon Penny Wong
Minister for Climate Change and Water

Intergenerational Report Shows Long-Term Costs of Climate Change

The 2010 Intergenerational Report, Australia to 2050: Future Challenges, provides yet another stark reminder of the massive environmental and economic costs of failing to act on dangerous climate change.

The report confirms that early action on climate change will allow strong long-term economic growth and rising living standards, whilst steadily transforming Australia to the low-emissions economy of the future.

Australia is one of the hottest and driest countries on earth and will be one of the earliest and hardest hit by climate change.

The report notes that without action to combat climate change Australia's GDP will fall by 8 per cent by 2100. This is equivalent to every single Australian being around $17,000 worse off (in today's dollars) by 2100 – and this is a conservative estimate.

The report highlights the benefits of introducing market-based mechanisms such as the Carbon Pollution Reduction Scheme, which represent the least costly way of addressing climate change and transitioning to a cleaner, greener economy. In this respect, the report is consistent with the Howard Government's own Shergold report on climate change, which found that market‑based approaches achieve large-scale emissions reductions at least cost to the economy.

Analysis in the report shows that the CPRS will cut the emissions intensity of industries right across the country. For example, the CPRS is estimated to halve the emissions intensity of the iron ore mining industry, and to reduce the emissions intensity of the motor vehicle manufacturing industry by more than three-quarters.

Australia's electricity generation sector will undergo a significant structural change under the CPRS. Energy will increasingly be provided from solar, wind, biomass and geothermal technologies, with the alternative energy sector expected to be up to 30 times larger by 2050.

The CPRS will drive large-scale emissions cuts at a much lower cost than more prescriptive government action. For example, even if every car in Australia were taken off the road, emissions would still not be cut enough to meet the Government's unconditional commitment to reduce emissions to 5 per cent below 2000 levels by 2020.

Australia to 2050: Future Challenges goes further than previous intergenerational reports in exploring the importance of environmental sustainability if we are to maintain and improve living standards for current and future generations of Australians.

In addition to the CPRS, the Rudd Government has acted on various fronts to move towards the low-emissions economy of the future. In particular, the Government is:

  • delivering on the expanded Renewable Energy Target;
  • investing $4.5 billion over nine years through the Clean Energy Initiative to support investment in low‑emissions technology; and
  • investing $3 billion over four years through the Energy Efficient Homes Package to encourage households to improve the energy efficiency of their homes.

Australia to 2050: Future Challenges provides a stark reminder of why the Government is so determined to tackle dangerous climate change so we can leave a healthier environment and a stronger economy to future generations.

CANBERRA
1 February 2010