Australia faces a stark economic choice between embracing net zero emissions by 2050 or continuing with current climate policies, with new analysis revealing the cheaper path forward.
The Cost of Complacency
Political figures including Nationals leader David Littleproud and Liberal senator Leah Blyth have recently questioned the affordability of climate action, with Littleproud incorrectly claiming the cost would reach $9 trillion and endanger essential services.
However, this perspective ignores the substantial economic damage that climate change itself will inflict if left unaddressed. Multiple recent analyses demonstrate that coordinated climate action represents the more financially prudent course for Australia and the global community.
Modelling Reveals Clear Economic Advantage
Research from Ortec Finance presents compelling evidence that insufficient climate action would shrink Australia's GDP by 9% by 2050, representing a loss of several hundred billion dollars.
Even a delayed response, where governments implement policies slowly before rushing to meet the 2050 deadline, proves more expensive than an orderly transition to net zero emissions.
The Australian Treasury reinforced these findings in a September report, concluding that clear and credible climate action will lead to more jobs, higher wages and better living standards for Australians. They warned that a disorderly transition would mean fewer jobs, less business investment, lower wages and higher power prices.
Global Context, Local Consequences
Further modelling from the Investor Group on Climate Change examined the impact of current global policies, which would lead to approximately 3°C of warming. This scenario would deliver a $656 billion hit to Australia's GDP by 2050.
In contrast, an orderly transition to net zero would leave Australia's economy $590 billion better off compared to the high-warming scenario.
Understanding the Climate Scenarios
The analysis compared three distinct pathways:
Net Zero: An orderly transition achieving net zero by mid-2050s with 1.6°C warming by 2100, featuring rapid low-carbon policy implementation and technology transition.
Delayed Net Zero: Limited policy action until 2030 followed by sudden, ambitious measures causing market disruption and financial instability.
High Warming: Current policies leading to 3.7°C warming by 2100, triggering multiple climate tipping points and severe physical risks.
The evidence consistently shows that proactive climate policy represents sound economic management rather than an unaffordable burden, with early action delivering significant financial advantages over delayed responses or continued inaction.
