Tackling climate change costs 1 per cent of GDP, yet Australia still refuses to act

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May 31 2021
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It will cost just 1 per cent of the world’s GDP to transition to a cleaner society and reduce climate change impacts, yet the Morrison government refuses to act and is now facing a class action.

A report released by the World Economic Forum showed that, collectively, the world needs to invest US$8.1 trillion over the next three decades to successfully tackle climate change, biodiversity and land degradation crises.

This amounts to US$536 billion per year.

In order to achieve this, the World Economic Forum has found that structural transformations are needed to close the $4.1 trillion finance gap between now and 2050, by building back more sustainably, by repurposing harmful agricultural and fossil fuel subsidies, and by creating economic and regulatory incentives.

Despite the need to act, nature and green causes account for just 2.5 per cent of the projected economic stimulus packages that world leaders are currently using to lift their economies post-COVID-19.

Private capital will also have to be scaled up dramatically to close the investment gap.

“The State of Finance for Nature report underlines the urgency and the criticality of increasing investment in nature,” said Justin Adams, head of the Tropical Forest Alliance at the World Economic Forum.

“It highlights how little is invested today – $133 billion represents only 0.1 per cent of global GDP, and a tripling of this feels like a no-brainer given the enhanced resilience this would provide to the global and local economies.”

The World Economic Forum also noted the huge business opportunity for those who adapt to a new world.

“Studies show this is also good for business – some $10 trillion in business opportunities and 395 million new jobs could be created by investing in nature-positive solutions.”

At the same time as the World Economic Forum releases its research, eight high school students have taken the environment minister to the Federal Court for failing in its duty of care to younger Australians.

The students alleged that approving a major extension to the Vickery coal mine in northern NSW would breach the minister’s duty.

An injunction was not ordered, but there will be further submissions on what the duty means for the minister’s decision and the mine.

“I am thrilled by today’s judgement,” said Ava Princi, 17, one of the students. “I’m thrilled because this is a global first. We understand it is the first time a court of law, anywhere in the world, has ordered a government to specifically protect young people from the catastrophic harms of climate change.

“My future – and the future of all young people – depends on Australia joining the world in taking decisive climate action.”

The judgment means the environment minister should not make decisions that harm young people. However, the judge stopped short of preventing the minister from approving the Vickery Extension Project.

The judge called upon the parties to confer on orders over the future of the proposed project.

“This is a victory for young people everywhere. The case was about young people stepping up and demanding more from the adults whose actions are determining our future wellbeing,” says Laura Kirwan, 17, another student behind the class action.

“Our voices are powerful and I hope this case inspires more young people to push for stronger, faster and deeper cuts to carbon emissions.

“Our futures depend on it.”

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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