This year’s IGR is mostly silent on the economic effects of climate change, which the 2010 report declared a ‘severe’ threat to the economy

Five years ago the 2010 intergenerational report declared that “climate change is the largest and most significant challenge to Australia’s environment. If climate change is not addressed, the consequences for the economy, water availability and Australia’s unique environment will be severe.”



But the 2015 report has struck a markedly different tone.

Under the headline “climate change”, it records the government’s emissions reduction target and the $2.55bn emissions reduction fund that it states “will” meet this goal and “avoid achieving such reduction simply by driving domestic production offshore – a process which would cost Australian jobs for no decrease in global emissions”.

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It is silent on the economic consequences of climate change, saying only that “the intergenerational report focuses primarily on government expenses that are affected by demographic change. The level of commonwealth government spending on the environment is not directly linked with demographic factors. Commonwealth environment programs do not vary automatically with population changes … nevertheless, there are costs associated with changes in the environment and climate.”

And it says nothing about the costs of meeting the deeper post-2020 reduction targets Australia will have to sign on to later this year. Many observers, including the communications minister, Malcolm Turnbull, have suggested that the costs of using “direct action” to meet deeper long term targets could be prohibitive. The document does mention a “safeguards” mechanism, which could impose limits on industrial emissions, if the safeguards turn out to be tough enough to turn the scheme into what is effectively a baseline and credit emissions trading scheme. It is not at all clear that cabinet will agree to do this.

It does say that some economic effects of climate change “may be beneficial - where regions become warmer or wetter this may allow for increased agricultural output, while others may be harmful.” It concedes Australia’s climate has warmed by 0.9 degrees since 1910 and the frequency of extreme weather has changed, that extreme fire weather has increased and that rainfall patterns have changed.

In 2010, spruiking the then Labor government’s emissions trading scheme, the IGR pointed out that “early action on climate change will allow strong long-term growth by steadily transforming the economy, rather than imposing on future Australians the need for a sharp, more costly shock to make the inevitable change to a sustainable low pollution economy”.

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The government had to include some mention of climate change in the 2015 document under a deal it signed with the Greens when it persuaded them in late 2013 to agree to abolishing the legislated limit on government debt.

In a letter to the Greens leader, Christine Milne, at the time, Joe Hockey pledged that future IGRs would “retain a dedicated section on the environment, including climate change and the effect of these policies and their impact on the Australian economy and commonwealth budget”.

Asked about the treatment of climate change in the document, the said “the thing that I think is going to be transformative in climate change is technology change, it is going to change the nature of the debate over time.” He said the government was doing its share of the “heavy lifting” on emissions reductions.

The Greens intend to move in the Senate to ask the independent parliamentary budget office to rewrite the report to restore the credibility of intergenerational reporting. The Greens also want to refer the report to the Senate budget cuts committee to examine its details and assumptions.

“Global warming has been ignored. All that’s here is a regurgitation of the government’s current and almost non-existent global warming policy. The report supposedly looks forward to 2055, but in 50 years people will look back at this report in the same way we now look at tobacco industry’s lies from the 1950s,” Milne said.

“You can’t have true intergenerational reporting without examining global warming and pollution from fossil fuels.”

John Connor, chief executive of The Climate Institute, said “when it comes to climate change, this intergenerational report barely addresses challenges for this generation let alone the next. It contains no projections of policy outcomes, no projections of the costs of climate impacts, and no recognition of the need to achieve a net zero emissions economy by mid-century.”