Climate change to hit tradies, machine operators and labourers

Australians will be forced to change the way they work, leading to millions of hours in lost productivity over the next 40 years.

Treasurer Jim Chalmers says that action on climate change was a ‘global environmental and economic imperative’. Picture: Picture: NCA Newswire / Gaye Gerard

Australians will be forced to change the way they work, including reducing their hours during the middle of the day, leading to millions of hours in lost productivity over the next 40 years, as the nation grapples with both “acute and chronic” impacts of climate change.

Treasury projections included in the government’s Intergenerational Report released on Thursday highlight the long-term threat from climate change to the economy and budget if global action is insufficient to meet targets set out in the Paris Agreement.

The report finds labour-­intensive workforces – such as tradies, labourers and machine operators – will be specifically vulnerable to the impacts of climate change as temperatures soar and reducing workers’ capacity to spend time outdoors.

Agriculture, construction, manu­facturing and service sectors are particularly exposed to the impacts of climate change, with government forecasts suggesting the service sector will see a 0.9 per cent reduction in labour productivity if temperatures rise by 4C by 2063.

Failing to restrict global warming to 2C or less over the next four decades will also cost the Australian economy between $135bn and $423bn in today’s dollars, as higher temperatures sap worker productivity, reduce crop yields and hit the tourist trade as the country’s beaches are washed away.

“If global temperatures were to increase by up to 3C or over 4C, without adaptive changes to current ways of working, Australia’s aggregate labour productivity levels could decrease by 0.2 to 0.8 per cent by 2063,” the report said.

Climate change will trigger mass changes to the current work system including reducing hours during the hottest parts of the day.

By contrast, Australia could benefit from up to $155bn in today’s dollars if global action successfully limits temperature increases to 2C. In a speech to the National Press Club on Thursday, Jim Chalmers argued that action on climate change was a “global environmental and economic imperative” and spruiked Labor’s commit­ment to cut emissions by 43 per cent by 2030.

Australia is in a strong position to capitalise on the global energy sector transformation, according to the report, with the nation’s exports of critical minerals expected to surge amid rising demand for electric vehicles and batteries.

With Australia already the world’s largest supplier of lithium, national export volume is projected to double over the next five years from 2.2m tonnes in 2022 to 4.5m tonnes by 2028.

The domestic transition will require “significant additional investment”, with the report pointing to estimates from the Australian Industry Energy Transformations Initiative that an extra $225bn of investment may be required by 2050.

Minerals Council of Australia chief executive Tania Constable said Australia risked “missing the boat” to capitalise on the nation’s critical minerals, warning against increased government regulation and “rigid and costly” industrial relations laws.

Australian businesses are vulnerable to soaring costs in energy, which may have a “substantial impact” on overall competi­tive­ness.

The government’s report labelled the physical impacts of climate change as both “acute and chronic” and said temperature increases had already had an impact on Australia’s economy.

Australian Industry Group chief executive Innes Willox welcomed the report’s focus on climate change adaption and achieving net zero emissions as “critical additions”.

The report finds “significant uncertainty” around the tourism sector, with Treasury forecasts suggesting Australia would see a reduction in tourism demand associated with higher temperatures projected to be half as big if warming was limited to 2C rather than to 3C.