Officials raise red flags on looming threat that could cause $40 billion in damages: 'Cascading shocks'

The Australian Climate Service has published a report that forecasts immense economic losses due to extreme weather and rising global temperatures, according to the Financial Review.

What are the financial climate costs?

Humans burn a lot of dirty fuels to make energy, which increases the planet's temperature. This causes a chain reaction that strains ecosystems around the world and puts humans and all kinds of plants and animals at risk. 

However, on top of these safety concerns are economic ones, which have the potential to deliver "cascading shocks to the financial system," per the Financial Review.

As the ACS report detailed, these losses going forward could include more expensive insurance, weaker retirement accounts, lower incomes and tax revenue, and disruptions to global trade, job markets, and government budgets.

Why is this prediction important?

The ACS forecast is one way to view the potential price of not taking care of the Earth. While it may require money today to mitigate pollution or establish cleaner energy sources, this report makes clear that the alternatives are far more expensive. 

To get a sense of these long-term figures — which are difficult to estimate — the authors of the report cited several key projections from experts. 

The annual damages of extreme weather in Australia, such as wildfires, floods, and cyclones, could eclipse $40 billion by midcentury. Meanwhile, property values could drop $611 billion over the same time. 

In addition, worsening heatwaves could mean losing between 700,000 and 2.7 million days of work each year by 2061. By that point, declines in labor production would cut economic output by hundreds of billions of dollars, according to the ACS approximations. 

How taking action can help limit climate costs

One of the most effective ways to avoid ballooning economic losses is for governments to work together to transition away from those planet-heating fuels, as well as hold polluting companies accountable. 

It also always helps for individuals to stay informed and push for positive change. 

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Taking such steps can keep people and animals safe from the effects of the changing planet. Using cleaner energies like solar and geothermal can even save governments money over time. 

"Australia cannot make a difference on its own, but we must play our part," opposition party leader Sussan Ley and treasurer Ted O'Brien said in a joint statement, per the Financial Review.

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