The economic cost of Australia’s fourth severe flood in just 18 months is expected to reach millions of dollars, but economists say that’s just the tip of the iceberg.
The Australians have already deposited more than $4.8 billion in flood insurance claims this year as floodwaters take a heavy toll on people’s lives and continue to destroy property in New South Wales.
The floods are also driving up the prices of fruits and vegetables at a time when households are already struggling to afford the rising cost of basic necessities.
Economists have said the rise in insurance claims and the continued rise in fruit and vegetable prices are an inevitable consequence of the government’s slow pace of action on climate change.
And without increased efforts to improve disaster resilience and reduce emissions, the economic and human costs of climate change will only worsen over the coming decades, according to Climate Council economist Nicki Hutley.
“By the end of the century, we’re talking about COVID-sized economic shocks every year, on average,” she said. The new dailyadding that the cost of the current floods was already in the millions.
Floods drive up grocery bills
Treasurer Jim Chalmers said on Wednesday that higher grocery bills would be an inevitable consequence of the latest floods which resulted in the declaration of disaster areas in 23 local government areas in NSW.
“Some of these areas that are under water are absolutely crucial food production areas,” he said on ABC radio.
“We will have shortages in some of the major fruits and vegetables.”
The comments come after a major Coles supplier said The new daily last week that impending flooding could easily disrupt supplies of everything from onions to broccoli.
The coming supply disruptions will be just the latest blow to household grocery bills, with fruit and vegetable prices rising 6.7% on the year to March, according to the latest figures from the ABS inflation.
Fruit and vegetable prices have risen at more than twice the rate of wages over the past year, crushing households across the country as part of a much wider cost of living crisis.
Climate costs are rising
Economists have said Australians will have to get used to higher food prices as climate change makes natural disasters such as floods, bushfires and floods more frequent.
John Quiggin, a professor at the University of Queensland, said the latest floods are another reminder that climate change is already imposing a massive human and economic cost on Australia.
“The 21st century has been one of Australia’s almost continuous climate disasters,” he said.
“Including severe droughts, catastrophic bushfires and repeated massive floods, the economic cost of these disasters is difficult to estimate, but the total is in the hundreds of billions.”
Earlier this year, advocacy group Farmers for Climate Action released a report warning that climate-induced disruptions to grocery store supply chains will become more common in the coming decades.
He said consumers would pay more for essentials like meat, bread, fruit and vegetables, and even suggested some products could be pulled from shelves entirely.
“A lack of action will make it virtually certain that over the next few decades Australians will, for the first time, face the prospect of running out of food in our major cities,” the report said.
“Decisive action today will help mitigate the worst impacts.”
Mitigation and emissions
Ms Hutley said some of the economic and human pain associated with climate change is unavoidable, after decades of global inaction on emissions and a general lack of resilience work.
But improving mitigation and emissions efforts now could help save the nation from the worst.
“In the last federal budget, we had $2 billion for emissions business, $6 billion for disaster recovery related to flooding earlier this year, and $12 billion for fossil fuels,” he said. she declared.
“Only a few hundred million have been earmarked for adaptation and resilience measures.
“We’re spending 97% of our money on recovery efforts and 3% on resilience – that’s just stupid.”