The Australian Federal Government, through the Treasury Department, released the sixth Intergenerational Report, a guide that has been published every five years since 2002 to guide long-term public investment decisions. The document projects that Australians will enjoy an extended life expectancy, work fewer hours, achieve higher incomes, have fewer children and rely on critical minerals to sustain economic stability. In addition, they will live in a hotter and less productive country.
One of the highlights of the projections for 2063 is that Australia’s economy is estimated to grow 2.5 times its current size, while revenues in real terms increase by 50%. The economy is projected to grow at an average annual rate of 2.2% over the next 40 years, in contrast to the 3.1% registered in the previous four decades.
The aging of the population is another relevant phenomenon: the number of people over the age of 65 is projected to double, while those who are over 85 years old triple, and those who reach 100 years old multiply by six. The median age is forecast to increase from 38 to 43 years.
Although a slowdown in population growth is expected, going from 1.4% in the last 40 years to 1.1% in the coming decades, it is estimated that Australia, which registered 25.4 million inhabitants in the 2021 national census , will exceed 40 million by 2063.
The aging of the population will cause the labor participation rate to decrease slightly from 66.6% to 63.8% and will put significant pressure on national finances. Government spending will be concentrated in areas such as health, care for the elderly, the National Disability Insurance System (NDIS), defense and debt interest payments.
The impact of the climate crisis on the economy
The increase in temperatures equal to or greater than 3 degrees Celsius due to the climate crisis could have a devastating cost to Australia, reaching up to A$423 billion (equivalent to about US$274 billion) over the next four decades.
Should Australia and other countries take no action to mitigate climate change, a 0.2-0.8% drop in the country’s productivity is expected by the year 2063.
The services, manufacturing, construction and agriculture sectors will be the most affected by this crisis, generating an estimated economic cost of at least 135 billion Australian dollars (about 87.5 billion US dollars).
Although all areas of Australia will experience higher temperatures during this period, some will be affected more than others. The average temperature in Australia will increase 1.7 degrees Celsiusand parts of central and northern Western Australia are projected to rise by 1.8°C, while the state of Tasmania, with Hobart as its capital, is projected to rise by 1.3°C.
The crisis poses a significant challenge for regional and rural communities, especially as rainfall patterns change and droughts intensify. Rising temperatures could adversely affect labor productivity in regions such as the state of Western Australia, whose capital city is Perth. He report urges to ensure that these regions are not cut off from the benefits of technological advances.
With rising temperatures, workers in exposed sectors may need to reconsider their exposure to heat or the physical intensity of their jobs. Certain occupational safety risks, such as heat stress, will also grow. These will be challenges for employees, companies and efficiency at work.
Presenting the report to the Canberra Press Club as a call to action, Australia’s Federal Treasurer Jim Chalmers warned that climate change could affect not only jobs and economic growth, but also the country’s security in a increasingly volatile world.
He also stressed that tackling the problem is “a global environmental and economic imperative.”
The Intergenerational Report is all about making the big shifts in our economy and our society work for us and not against us. I’m optimistic about the future but we need to adapt and understand the big challenges under way and the #IGR will help us do that. #auspol #ausecon pic.twitter.com/sQdEeRQeRt
—Jim Chalmers MP (@JEChalmers) August 21, 2023
“The Intergenerational Report is about making significant changes in our economy and society work for us and not against us. I am optimistic about the future, but we need to adapt and understand the big challenges that are underway, and the report will help us get it done,” Chalmers said on his X social network account.
Prospects for controlled climate change and a zero emission economy
The report notes that, if the rise in temperatures can be limited to 2 degrees Celsius, Australia could see an increase of approximately 155 billion Australian dollars (about 100.4 billion US dollars or 92.4 billion euros) in its Gross Domestic Product.
The Australian government of Prime Minister Anthony Albanese, who came to office in 2022 and leads the Labor Party, has made a commitment to reduce polluting emissions by 43% by 2030, compared to the 28% set by the Conservative Administration. former Prime Minister Scott Morrison.
The Executive seeks to achieve neutral emissions by 2050 and transform Australia into a renewable energy powerhouse. In a world where climate change threatens a rise of 3.2 degrees Celsius this century, according to the Intergovernmental Panel on Climate Change (IPCC), Australia is trying to lead by example.
![File: A coal mine in Bulga, in the Hunter Valley, north of Sydney, November 18, 2015.](https://s.france24.com/media/display/9db34908-cebd-11ed-b766-005056a90284/5897ad7a37e2b2a9c7a122e654a9e80921828c31.jpg)
The transition to a net zero emissions economy will bring about changes in demand for Australian exports, cutting the market for steam coal in half.
Nevertheless, This transition will also create opportunities, with demand for critical minerals such as copper, nickel, cobalt, lithium, chromium, graphite, manganese and zinc expected to increase.which are key to technology and clean energy.
Balance and joint effort for a better future
The Intergenerational Report 2023 marks a milestone in informed decision-making for Australia’s future and puts climate change at the center of the economy. The magnitude of the projected economic costs and the urgency to act emphasize the need for joint and sustained action.
Australia is at a crossroads, facing the prospect of massive losses if the climate crisis is left unchecked. With an aging population on the horizon and challenges in mind, the country must find a balance between economic growth and sustainability, as well as embrace the transition towards a greener and more resilient economy.
A commitment to net zero emissions and a focus on the opportunities of technology will be key in the fight against climate change and in building a sustainable future for generations to come.
#Aged #hotter #productive #Australia #forecast