Mar 03, 2015 - 12:01am
The purpose of the Intergenerational Report is to assess the sustainability of current government policies over a long-term timeframe (40 years). Treasurer Joe Hockey agreed in December 2013 that all future Intergenerational Reports would include a dedicated section on the environment and climate change, “and the effect of these policies and their impact on the Australian economy and Commonwealth Budget”.
No long-term analysis of federal policy can credibly ignore climate change, given that its effects are already being felt, and will worsen over coming decades. Climate change will have a material impact on Australia’s fiscal sustainability, economic growth, and standard of living. For example, Australia’s ability to take advantage of growing markets for agricultural produce is dependent on keeping climate change to a minimum and investing significantly in adaptation.
Leading global financial institutions and businesses recognise that achieving economic decarbonisation, or net zero emissions, is pivotal to achieving the internationally agreed goal to avoid 2°C warming above pre-industrial levels (‘2°C goal’).
The Intergenerational Report should contain:
1. Projections of Australian emissions to 2055 under
legislated policy and policies in development.
2. A carbon budget and emission pathway to net zero emissions consistent with a fair Australian contribution to the global 2°C goal.
3. A range of estimates of the social cost of carbon, developed through a transparent and scientifically rigorous consultative process, in order to define the benefits of emission reduction policies.
4. Estimates of the impacts and costs to Australia of climate change scenarios including:
‐ achievement of the global 2°C goal
‐ the most likely climate change implied by the
current trajectory of global emissions (warming of
4°C or more)
‐ less likely but catastrophic climate change (e.g. severe impacts with 5 per cent probability).
5. Evaluation of risks of financial system contagion from asset stranding and climate-related impacts, particularly regarding core assets such as superannuation and housing.
Click below for the full document.