By 2050, Australia will face COVID-scale losses every year
Half a century before the reckoning arrives, economists have placed a price on inaction: nearly 900,000 livelihoods and three trillion dollars, the slow compound interest of a risk deferred. A Deloitte analysis released in late 2020 confronts Australia with the arithmetic of climate indifference, arriving at a moment when the country's political class remains divided not on whether to act, but on how urgently and by whose hand. The report reframes an old moral argument as an economic one — not a question of what Australia owes the future, but of what the future will cost if the present does nothing.
- Australia's economy could permanently shrink by six percent by 2070 if climate change goes unaddressed — a contraction Deloitte compares to absorbing a COVID-scale shock every single year from 2050 onward.
- The report lands into a political standoff: the Morrison government insists technology investment and market mechanisms are sufficient, while Labor accuses it of running an anti-climate agenda by refusing a firm net-zero commitment before 2050.
- Deloitte's chief economist drew a direct lesson from the pandemic — catastrophic risks ignored become catastrophic costs paid — and warned the window for a cheaper, more orderly transition is closing fast.
- The upside is real but conditional: proactive policy reform and private investment could generate $680 billion in growth and 250,000 new jobs, but only if government and business accelerate the shift together.
- The report's principal author stripped away the political noise with a blunt verdict — inaction is itself a policy choice, and by every economic measure, it is the most expensive one available.
A Deloitte Access Economics report released in late 2020 put a precise economic cost on Australia's climate inaction: $3 trillion in lost output and nearly 880,000 jobs gone by 2070. Modelling unchecked global warming, the firm found Australia's economy would contract by six percent over fifty years — a permanent wound that deepens with each passing decade.
The report's timing sharpened an already bitter political divide. Chief economist Chris Richardson drew on the pandemic as a parable: ignoring catastrophic risk doesn't make it cheaper, it makes it costlier. He called for policy and regulatory reform to unlock business investment, pointing to a $680 billion growth opportunity and 250,000 new jobs if Australia moved decisively. The window, he warned, was narrowing.
The Morrison government held its ground, insisting its technology investment roadmap offered a practical path to lower emissions without burdening households or businesses. It declined to commit to net-zero by 2050 on any fixed timeline. Labor's climate spokesman Mark Butler accused the government of an anti-climate agenda; the government responded by calling Labor bitterly divided and without a credible plan.
Report author Pradeep Philip cut past the posturing. By 2050, he said, inaction would deliver COVID-equivalent economic damage every single year. The transition ahead would create winners and losers — new minerals industries, upgraded energy infrastructure, reshaped investment flows — but the alternative was a loss shared by everyone. The report's final logic was economic, not moral: Australia can no longer ask whether it can afford to act. The only remaining question is whether it can afford not to.
A new economic analysis has put a number on what Australia stands to lose if it fails to act on climate change: three trillion dollars and nearly 900,000 jobs over the next half-century. The figure comes from Deloitte Access Economics, which modeled what happens to the country's economy if global warming proceeds unchecked. By 2070, the firm found, Australia's economic output would contract by six percent—a permanent shrinkage that compounds year after year.
The timing of the report underscores a particular kind of irony. Climate change has been a political flashpoint in Australia for more than a decade, yet this stark economic warning has done little to move the major parties closer together. If anything, it has thrown their disagreement into sharper relief. The Deloitte analysis arrives as the government faces mounting international pressure to commit to net-zero emissions by 2050—a deadline the Morrison administration has resisted, preferring instead to emphasize technology investment and market-based solutions.
Chris Richardson, Deloitte's chief economist, framed the report as a lesson drawn from the pandemic. The coronavirus crisis, he argued, had exposed the cost of ignoring catastrophic risks. Climate change, he suggested, was the next such risk—and the window to address it was closing. "Australians need policy and regulatory reform that modernises our economy and unleashes business investment," Richardson said. The payoff, he noted, could be substantial: if Australia rises to the challenge, the economy could expand by $680 billion and create 250,000 jobs. But the opportunity, he warned, was running out.
The government's response emphasized its existing approach. A spokesman for Energy Minister Angus Taylor said the Morrison administration would continue delivering "practical measures" through its technology investment roadmap—measures designed to create jobs, cut costs, and reduce emissions without imposing new burdens on households or businesses. The government, the spokesman insisted, was committed to achieving net zero, but on its own timeline and through its preferred mechanisms.
Labor's climate spokesman Mark Butler took a different view. Scott Morrison, he said, was pursuing an "anti-climate change agenda" by refusing to commit to net-zero emissions before 2050. Australians, Butler argued, needed a government willing to act decisively. The government's spokesman fired back, accusing Labor of being "bitterly divided" on energy policy and lacking any coherent plan to reduce emissions or account for economic impacts.
Pradeep Philip, the report's principal author, cut through the political posturing with a stark observation: doing nothing had become a policy choice, and it was an expensive one. By 2050, he said, Australia would face economic losses equivalent to the scale of COVID-19 every single year if climate change went unaddressed. The cost of inaction, he emphasized, only grew with time. Addressing the crisis would require both government and private sector to accelerate the shift to a low-emission economy—mining minerals for new technologies, upgrading energy infrastructure, and making investments that would inevitably create both winners and losers. "But we'll all be losers if we fail to act," Philip said.
The report offers a choice, then, though framed as an economic rather than a moral one. The question is no longer whether Australia can afford to act on climate change. The question is whether it can afford not to.
Notable Quotes
Doing nothing is now a policy choice, and it is costly. By 2050 Australia will experience economic losses on par with COVID every single year if we don't address climate change.— Pradeep Philip, principal author of the Deloitte report
The benefits of acting are huge. But we are fast running out of opportunity.— Chris Richardson, Deloitte chief economist
The Hearth Conversation Another angle on the story
The report says Australia could lose $3 trillion. That's an enormous number. How do economists even arrive at a figure like that?
They're modeling cascading effects across the entire economy—agricultural productivity declining, infrastructure damage from extreme weather, health costs, lost productivity. It compounds over 50 years. The six percent contraction by 2070 is the aggregate effect of all those pressures working simultaneously.
And the jobs figure—880,000 jobs. That seems almost abstract. What sectors would actually be hit hardest?
The report doesn't break it down by sector in the material I have, but you'd expect agriculture, tourism, construction, and energy to face significant disruption. Some regions would be hit far harder than others.
The government says it's pursuing net zero through technology investment. Why does Labor think that's not enough?
Labor wants a binding commitment to 2050, not just a goal. They're arguing that without a hard deadline and a detailed pathway, there's no accountability. The government prefers flexibility—it believes market mechanisms and innovation will get there without mandates.
Deloitte says acting could create 250,000 jobs. That's a lot of jobs. Why isn't that the headline?
Because it requires upfront investment and policy change. Those jobs don't materialize automatically. You have to build the infrastructure, retrain workers, shift capital. The political risk is real, even if the economic case is strong.
The report mentions that "we'll all be losers if we fail to act." That's pretty blunt language for an economics firm.
It is. It suggests the author believes the evidence is overwhelming enough to warrant directness. When you're comparing inaction to annual COVID-scale losses, the usual hedging falls away.