Chris Bowen (Prospect, Australian Labor Party, Minister for Financial Services, Superannuation and Corporate Law) Share this | Hansard source

I thank the honourable member for his question and his interest in this very pressing issue. The government has consistently said that the costs of action on climate change are dwarfed by the costs of inaction. One industry that understands this is the insurance industry. An increase in the number of insurance claims will place significant pressure on the financial sector and may result in reduced insurance availability and increased premiums for those in vulnerable areas. The insurance industry understands that climate change is real and it understands that the community, business and government need to act. It is clear that insurance premiums and the availability of insurance will be affected if there is no action on climate change.

The most obvious impact of climate change on the insurance sector will be the increase in property losses from extreme weather events. As the Business Roundtable on Climate Change has said, 19 out of the 20 largest property insurance losses in Australia since 1967 have been weather related. Anything that is insured, whether it be property, crops, livestock, business operations or human life, is vulnerable to weather related events. In its submission to the House of Representatives Standing Committee on Climate Change, Water, Environment and the Arts, the Insurance Australia Group estimated that the value of property in Australia exposed to risk of land being inundated or eroded by rising sea levels ranged from $50 billion up to $150 billion. The member for Hume and others can make their jokes about building arks. This is the view of an industry which understands the impacts of climate change on Australia and understands the costs of not acting.

The Climate Change Working Group of the United Nations Environment Program Finance Initiative estimates that the weather related losses could grow to be as high as US$1 trillion in a single year by the year 2040, so the longer we wait for action on climate change the more it will cost and the worse its effects will be. That is why the government has a clear strategy to shift Australia to a low-carbon future with the Carbon Pollution Reduction Scheme, which we are exerting every effort to have passed so we can start to address some of these looming costs for our nation and for individuals. There are some in the House and elsewhere who have attempted to peddle the false dichotomy that you can have action on climate change or you can act to support jobs. This is very much a false dichotomy. Many people would want us to believe that, but the opposite is the case.

The truth is that the fight against climate change can also be an opportunity to create jobs: opportunities not just in green technologies, not just in alternative energy but also in areas which might not be so obvious even to the climate sceptic leader, the member for Tangney—areas like financial services. The opportunity for timely action by Australia gives us an opportunity in the financial services field. Last week I informed the House that Australia had been ranked second in the world in terms of global financial centres by the World Economic Forum, and this provides us with a great opportunity. We are committed to using this strength to position Australia as an early mover in the creation of new and significant markets, especially in relation to the trading of carbon credits.

What are these actions predicated upon? They are predicated upon action. Further delays and further uncertainty provide a great obstacle to Australia capitalising on these opportunities. They provide an obstacle to us capitalising on the opportunity of being the carbon trading financial services hub of the Asia-Pacific region. This is a great opportunity for Australia, but further delay and further uncertainty are a great threat to that opportunity. Australia has before it two clear paths—action or delay. We are committed to action—action to combat climate change and action to create jobs and a new economy which adjusts to climate change.

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