When money’s tight, we can’t afford to worry about our costliest threat

When you ask Australians to name their biggest worries, there’s normally a long list of grumbles ranging from the economy to healthcare, housing, crime, immigration, taxation and even petrol prices. But over the past 2½ years, one complaint has come to dominate: the cost of living.

Polls show other big national challenges have been pushed down the public’s priority list, including the need to tackle climate change.

Illustration: Simon LetchCredit:

The Resolve Political Monitor, published by this masthead, regularly asks voters what the government’s top policy priority should be. Back in January 2022, just before Russia invaded Ukraine, stoking a worldwide inflationary surge, 16 per cent ranked “keeping cost of living low” No.1, four points higher than “environment and climate change” on 12 per cent.

Last month that gap had widened to 47 points, with cost of living a top priority for 53 per cent. The share opting for environment and climate change had halved to 6 per cent.

Jim Reed, who conducts the Resolve Political Monitor, says that when households are very focused on basic needs, such as putting food on the table and keeping up with mortgage payments, they have less bandwidth to consider other issues.

“The environment, including climate change, is a second-order issue for many people right now,” he says. “Living costs have become all-consuming.”

The federal government describes the transition to net zero carbon emissions by 2050 as the “biggest and fastest economic transformation since the industrial revolution”. But with financial pressure top of mind for so many households following a long period of elevated inflation and higher interest rates, public attitudes to the energy transition have shifted.

An annual climate change survey published by polling firm Ipsos in July showed 41 per cent expected the transition to green energy to have a “negative impact” on Australians’ cost of living, 10 percentage points higher than in 2022. Support for Australia being a net zero front-runner had declined; 58 per cent said we should be a global leader in the energy transition, down from 64 per cent in 2022.

Meanwhile, support had risen for the statement: “Australia should only take action on climate change if all other countries are contributing a fair share.” Two-thirds of those surveyed wanted lower energy prices to be a priority.

“The cost-of-living environment is causing many Australians to question the impacts of the energy transition on their households’ finances,” says Ipsos director Stuart Clark. “And that is reducing the appetite for Australia to take a leading role in the global transition.”

The Ipsos study showed public understanding of the energy transition is poor. Only 8 per cent said they understood “very well” what was being done to meet Australia’s net zero commitments – a woefully low share considering the scale, cost and importance of the clean energy transition. More than half (54 per cent) said they did not understand what was being done to meet those commitments.

Even though nearly 40 per cent of Australia’s electricity generation came from renewable sources last year, most thought the net zero transition was not yet under way. Only 60 per cent were confident they understood the causes and impacts of climate change.

Worries over cost-of-living pressures do not mean Australians are no longer concerned about climate change. Despite two decades of polarising debate on the topic, support for urgent action to reduce carbon emissions is robust. A recent Lowy Institute survey found six in 10 Australians agree that global warming is a serious and pressing problem and that we should take steps now “even if this involves significant costs”. According to Lowy’s polling, that share has been stable since 2018.

Only about one in 10 take the view that “until we are sure that global warming is really a problem, we should not take any steps that would have economic costs”.

There is a big gap between younger and older Australians on this issue – 73 per cent of those aged 18-29 say global warming is a serious and pressing problem, compared with 51 per cent of those aged over 60.

Ryan Neelam, the director of Lowy’s public opinion and foreign policy program, says the heightened concern over cost of living, and how the clean energy transition might affect electricity bills, does not mean people have moved away from supporting action on climate change. “The results of our polls strongly show that that’s not the case,” he says.

The past 2½ years have shown how much public attitudes to climate action are affected when households are hit by sustained cost-of-living pressures. And yet sentiment can also shift quickly in the aftermath of weather-related natural disasters.

When the Black Summer bushfires raged across south-eastern Australia five years ago, climate change catapulted to the top of Australia’s worry list.

In January 2020, the Ipsos Issues Monitor, which asks a representative sample of Australians to select the top three issues facing the nation, showed the environment had leapfrogged cost of living, healthcare, the economy and crime to become our top concern.

Let’s hope a natural disaster is not the only thing that drives support for climate action.

Matt Wade is a senior economics writer at The Sydney Morning Herald.