Senate Economics Legislation Committee, , 1:50:52 to 1:55:07
Questioning regarding the economic modelling of physical climate risks, including the impact of extreme weather events like El Nino on the farm sector.
Topics: Climate change, Agricultural productivity, Drought and disaster support
Speakers: Dr Angelia Grant, Senator Nick McKim, Jenny Wilkinson, Hon Jane Hume
I'll just have maybe one or two more, and that'll do me for Ms. Wilkinson. Very quickly. Very quickly, thanks. Wilkinson, there's a what's known as the Godzilla El Nino coming at us. I mean it's it's like it the name sounds funny, but it is horrifying to look at the data around ocean temperatures, and we all know that's going to have a massive impact on conditions in Australia this summer, particularly the Eastern Seaboard. Have you modeled the cost of the Australian economy of this El Nino?
So again, I'll I'll ask uh Dr. Grant to speak to this. I haven't heard a call to Godzilla El Nino. I have heard it called there's another term that I've heard it called. Um and um we're certainly aware, I mean, with with you know changes in weather patterns absolutely have impacts. I think uh it's always hard understanding exactly exactly how these weather patterns might unfold. So you know, there have been earlier times where an El Nino has led to drought conditions on the East Coast. Um I'm now reading, um, and I'm sure you're better informed than I am that actually um this El Nino, given the nature of it, might in fact lead to much wetter conditions on the East Coast. So it's it's quite hard to work out how to flow that through. But let me just turn it turn to um Dr. Grant.
Thanks, Scott.
I don't have a lot to add, except to say we are monitoring this very closely with ABEARS. And as the Secretary said, uh, it is impacting different regions quite differently and having different impacts on different parts of the economy. So we continue to stay very close to the issue and we'll we'll um have an assessment in terms of thinking about the impact on the economy, weather events, droughts in particular, can be quite significant, even though the farm sector is only two per cent of the Australian economy, they can see very significant fluctuations in output. So we will watch this closely.
Thank you. Just one last follow-on, Chair. Um we're heading for catastrophe. Globally, we are heading for a cataclysmic future where actuarial studies in the UK have shown up to four billion people dead this century as a result of climate change. Why don't you model the impacts of climate change on the Australian economy? Not just in the context of the El Nino, the record horrifying El Nino that's coming down the line, but why don't you model the impacts of climate change on the Australian economy in the short, medium and long term? Because wouldn't that actually focus the minds of people like the Minister on the need to, for example, stop opening new coal and gas mines, stop destroying our forests and emitting all the carbon in those forests if they could actually see the almost certain massive cost to our economy. So have you been asked to model the costs and the impacts of climate change on the Australian economy, and why aren't you doing that?
So again, the intergenerational report we went into this, Dr. Grant?
So Senator, uh, we did some modelling in the 2023 intergenerational report on heat. Uh it was partial analysis. We tried to extend that analysis in the 2026 intergenerational report on page 67, there is a section on physical risks. We took one of the IP uh triple C scenarios, and what we tried to do is translate that into some of the Australian economy sectors. So you could see that in terms of higher temperatures, there are some sectors we expect will be significantly affected in the Australian economy. We do expect agricultural crop yields to be affected in the long run. So we continue to do some physical climate risk modelling as part of intergenerational reports. As part of this, just to say one of the innovations we are trying to do bottom-up modelling, that is rare. So normally the international modelling is top-down, it gives much more significant impacts than the bottom-up. So part of this work is us trying to reconcile that and contribute to the analysis in this important part of the sectors and how they're affected in the economy. So that is in there.
Thank you.