In an Australian ABC News story in early February, Deloitte Access Economics Partner Nicki Hutley referred to the potential cost of climate change as “astronomical”. In this episode, Economics Explained host Gene Tunny chats with Nicki about the cost of action compared with the cost of inaction on climate change. 

Use these (approximate) timestamps to jump right to the highlights:

• 1:10 – Nicki describes why the costs of unmitigated climate change would be "astronomical"
• 4:40 – reference to Deloitte report for Australian Business Roundtable finding cost of extreme weather events in Australia will be $40 billion per year by 2050
• 8:00 – further discussion of cost of inaction, including a reference to Deloitte’s report on the value of the Great Barrier Reef
• 10:30 – what needs to be done to avert catastrophic climate change (i.e. need to transition away from using fossil fuels) and the distinction between mitigation and adaptation
• 15:20 – current international agreements/measures won’t reduce emissions enough
• 16:00 – discussion of the inadequacy of Australian state government aspirational targets for renewable energy in the absence of a carbon price/emissions trading scheme or carbon tax
• 21:00 – Nicki argues that, due to the lack of a carbon price, we are not encouraging sufficient investment in renewables or in R&D – reference to blue and green hydrogen (check out Woodside’s website for information)
• 22:50 – Gene mentions Brian Fisher’s controversial estimate of the cost of the Australian Opposition’s climate change plan of $500 billion and asks Nicki about the cost of acting versus not acting, with Nicki noting the cost of inaction would be many multiples of the cost of action
• 25:40 – discussion of implications of transition away from fossil fuels for coal miners, etc.
• 27:40 – costs of renewable energy vs coal