Climate change will cost poorer regions more

By Adam Coleman in Darwin

The annual State of the Regions Report for 2007-08, launched yesterday at the National General Assembly of Local Government in Darwin themed A Climate for Change, has found the costs of managing climate change will be higher outside urban areas.

The report from leading forecast group National Economics suggests the costs of climate change – including enhanced water security costs, loss of production and carbon prices – will fall disproportionately on non-metropolitan regions.

“Non-metropolitan region households will have up to double the cost of climate change, compared to metropolitan regions, with only a quarter to half the capacity of metropolitan regions, in terms of income and wealth, to absorb the additional costs of climate change,” the report says.

The impacts don’t happen equally across the board,” said ALGA president, Cr Paul Bell.

“Already some of the impacts are vegetation management have impacted adversely on some regions. The impacts of climate change…are quite often in places that cannot afford further challenges to their economies,” he said.

Similarly households are also affected disproportionately says Dr Peter Brain of National Economics.

“The real cost to a $50,000 household, of a carbon cost of one dollar, is half that of a household of say $25,000 per year with the same number of people in the household.

One you adjust that you can see that in a poorer household a $25 a tonne carbon tax is up to four or five times the burden as it is to households with higher incomes,” he says.

Up front costs

One possible scenario modelled and developed in the report estimates the up-front costs to Australia’s households from climate change at $14 billion to $17 billion annually (up to $60 weekly for rural households and $32 for metropolitan households) composed of carbon price, loss of farm income and water security operating costs.

“This year’s report looks at 64 regions and focuses on the over-arching theme of better understanding the impacts of climate change on Australia’s regions," said Cr Bell.

“We cannot afford to miss the train on this one. Local and regional communities are already bringing in mitigation and abatement measures which must be supported by government.”

“The key issue to address is that these costs will fall disproportionately on the regions that can least afford them,” Cr Bell said.

For more information or to order the report see:

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