5 Reasons Why Fossil Fuel Producers Should Help Pay for Climate Disasters
The Australia Institute is proposing the creation of a National Climate Disaster Fund, financed by a levy of $1 per tonne of carbon pollution resulting from all coal, gas and oil produced in Australia. Here are five reasons why fossil fuel producers should contribute to the growing cost of climate disasters;
1 // The costs of increasingly severe natural disasters in Australia are astonishing
Natural disasters are estimated to currently cost Australians around $13 billion per year. The Black Saturday bushfires in Victoria in 2009 cost the Australian Economy over $7 billion alone. Most of this damage occurred in one day. The current fire disaster in Australia began in winter, with no end in sight and has burned around 10 times the area burned in the Black Saturday bushfires. Without serious action on climate change, climate-fuelled disasters will only become more frequent and intense.
Insurance claims from the 2019/20 bushfires alone have already reached $375m and will continue to rise. The majority of property damage is not insured, and the economic costs of the social impacts including health impacts and disruption to people’s lives and businesses are likely to be greater than all the direct costs of property and infrastructure damage.
2 // Currently, most of the costs of rebuilding after a disaster are borne by individual affected communities and Australian taxpayers
The costs of climate disasters are currently almost entirely borne by ordinary Australian households and businesses.
We pay for emergency response, relief and reconstruction through higher taxes, rates and insurance premiums. Many of the costs are directly absorbed by households and businesses as uninsured losses, lost income and impacts on our health. In the end of all the costs currently come back to us.
Australian communities and charities are being forced to step in and cover the costs of disaster recovery. The government should step up, but rather than letting taxpayers foot the bill, they should make sure the current costs are recovered through a levy on the very fossil fuel companies that are fuelling these disasters.
Burning fossil fuels is by far the largest cause of global warming. Australia is the largest exporter of coal and Liquefied Natural Gas (LNG) in the world, and we have a far dirtier energy system than most other countries. Currently, emissions from coal and gas produced in Australia add over 1.5 billion tonnes of heat trapping gas to the atmosphere every year.
Without a levy on fossil fuel producers, the companies who are fuelling the climate crisis are currently paying nothing towards covering the costs of natural disasters. Most of these companies pay little if any company tax, and so are in a very good position to make a contribution.
3 // Extreme drought, heat and natural disasters are all predicted to increase in regularity and severity over the coming years
The costs of prevention against, and rebuilding from, climate-fuelled natural disasters will only increase over time as the effects of global warming become more pronounced.
The Government has now acknowledged the link between global warming and these disasters. Placing a modest climate disaster levy on the companies that are responsible is an important next step.
4 // It would be great for the economy
It is a fundamental principle of economics that companies profiting from activities that cause damage to others should pay the costs of that damage.
The Climate Disaster Levy would both fund projects to help businesses and companies recover from the current fires and help to protect us from escalating future disasters. This would include grants to households and businesses, but also large infrastructure projects that would provide many thousands of jobs.
The levy would also shift the economic burden from ordinary Australian households and businesses to the large global coal, oil and gas producers that are causing the problem. With these costs covered by the levy, this would free up money from our taxes for better services, and money from households and businesses to be spent in other more productive areas of the economy.
A $1 levy per tonne of carbon pollution on fossil fuel production in Australia would currently raise around $1.5 billion a year for the National Climate Disaster Fund. This is a modest proposal that represents only a small fraction of the total economic harm being caused by these emissions, which is estimated to be over $400 per tonne. However it would make an enormously helpful contribution to our recovery.
5 // Australians know there is a problem and support the introduction of a levy
Polling undertaken for The Australia Institute’s 2019 Climate of the Nation report found that 62% of Australians support the introduction of a fossil fuel levy to pay for the impacts of climate change, with only 21% opposed.
Thousands of Australians have already signed The Australia Institute’s petition calling for the introduction of a National Climate Disaster Fund and you can add your name here > https://nb.tai.org.au/climatedisasterlevy
The Australia Institute’s full report on the proposal for a National Climate Disaster Fund is available here
You can add your name to The Australia Institute’s petition, calling for a National Climate Disaster Fund here