Deloitte Report Warns of Massive Financial Burden on Young Australians from Climate Inaction
A groundbreaking report from Deloitte Access Economics has revealed the staggering economic consequences that younger generations will face if Australia continues with business-as-usual approaches to climate change. The analysis, conducted by a team of young economists, projects that Generation Alpha Australians could each lose approximately $185,000 over their lifetimes due to climate impacts.
Intergenerational Inequality in Climate Costs
The comprehensive modelling compares the financial impacts across different generations, painting a stark picture of intergenerational inequity. According to the report, millennials would face lifetime costs of around $130,000, while Generation Z Australians would experience losses of $165,000 each by 2070. For Generation Alpha, those born from 2010 onward, the financial burden escalates to $185,000 per person.
Rhiannon Yetsenga, an associate director at Deloitte Access Economics and co-author of the report, emphasized that climate change represents more than just an environmental concern. "Taking action on climate change is not just an environmental or moral issue," Yetsenga stated. "It's really a question of intergenerational inequity. For this generation, climate change is not a distant threat but an immediate, lived experience with severe consequences."
Calculating the Climate Cost
The economists developed sophisticated models examining two distinct scenarios. The first, termed "insecure youth prosperity," assumes continued global warming based on current policies. The second, a "secure" scenario, envisions more aggressive action achieving net zero emissions by 2050. The researchers then estimated GDP per capita losses over coming decades against a hypothetical world without climate change, converting these future impacts into present-day dollar values for each generation.
The damage calculations encompass multiple economic factors including reduced worker productivity, infrastructure and property damage, increased health risks, and rising healthcare costs. The report also highlights how changing climate patterns and more frequent extreme weather events would undermine tourism and destabilize agricultural sectors.
Locked-In Costs and Policy Implications
Yetsenga noted that many climate-related costs are already unavoidable due to the lingering effects of past emissions. "Many of these costs are already locked in because emissions linger in our atmosphere for 30 years," she explained. The report advocates for implementing a carbon price as the most efficient mechanism to drive emissions reduction, while suggesting that expanding Australia's safeguard mechanism would represent a positive step forward.
The analysis reveals that the damage to Generation Alpha's prosperity from continued climate inaction would be nearly ten times greater than that suffered by baby boomers, and more than double the costs borne by Generation X Australians. However, the report also offers hope: if decision-makers can drive sufficient climate action to reach net zero by mid-century, millennials and Generations Z and Alpha could avoid costs of approximately $50,000, $70,000, and $80,000 respectively over their lifetimes.
Economic Opportunities in Climate Action
Contrary to common perceptions, Yetsenga argued that addressing climate change need not come at the expense of economic growth. "I think there is a big opportunity for Australia if it invests the right way and sets itself up for a green future," she said. "We are blessed as a country with an abundance of resources and land, sun and wind. I wouldn't want to send the message that we have to compromise, because done right, this could be an opportunity."
The report emphasizes that Australia should pursue new green and sustainable industries, such as green iron production and critical minerals development, to "future-proof" the economy while addressing climate challenges.
Broader Context and Expert Perspectives
Ken Henry, former Treasury secretary, commented on the Deloitte findings, noting they demonstrate a "shifting of the intergenerational burden." Henry observed, "We have been kicking this can down the road so future generations will have to bear more of the impact of climate change and pick up the tab for more climate action and the costs of adapting to climate change."
The Deloitte report coincides with recent World Meteorological Organization data confirming that 2015 to 2025 represent the hottest eleven years ever recorded. While surface temperatures have risen significantly, the organization notes that this represents only about one percent of the total heat accumulating in Earth's broader climate system.
The young economists behind the analysis argue that policymakers must adopt more holistic measures of national progress, emphasizing that "a growth model cannot be sustainable if it is not emissions-reducing." Yetsenga summarized this perspective: "The idea would be to have sustainable growth – that we are not pursuing growth at all costs, but also considering the environment and how it affects different communities."
