The Australian Government’s latest Intergenerational Report was released last week but misses an opportunity to start a key conversation. Looking 40 years into the future – what used to be two generations but is now closer to one given that the average age of parents having their first child birth is now over 30 – it is updated every five years or so.
In this case the report predicts the Australian population will have grown to around 40 million (from just under 24) – not unlikely given the current net growth of 1 person every 90 seconds or so. The average person will be older, with relatively fewer of working age and many people living longer into retirement. We’ll need a lot more healthcare and pension costs will soar, which will need to be funded from a relatively smaller tax base due to the reduced overall labour participation rate.
Meanwhile, by 2055, atmospheric carbon dioxide concentrations are expected to be anywhere between 480 and 580 parts per million, up from around 400 today (a 20-45% increase) and from about 320 when formal records began around 60 years ago. Average global temperatures, in turn, are likely to rise by a further 1-1.5 degrees C over current levels. Mean sea level rise is likely to be between 5 and 30cm. In these projections, the lower level of each range assumes deep cuts are made urgently to global greenhouse gas emissions.* To borrow a cricketing term, the “required run rate” involves cuts of around 6% per year, versus actual performance last year of an estimated increase of about 2.5%**
While it does contain a brief section on climate change, the 2015 Intergenerational Report is largely silent on the effects of these impacts of climate change on Australia’s future population and economy. In terms of its use as a facilitator of hard conversations between governments and the people, it fails to ask critical questions such as:
How will we keep our elderly (and outdoor workers such as farmers and construction personnel) safe from searing heat waves, which are expected to increase in intensity and frequency and exacerbate our health spending crisis?
How will we ensure fresh water security for a population base nearly 70% greater than today’s, particularly with rainfall patterns becoming more erratic?
How will we maintain a productive agricultural sector to feed Australians (and our export partners) with alternately parched, drenched and warmer farmlands?
And how will we deal with exposed coastal property and critical infrastructure such as ports, key airports and roads from storm surges that will be significantly heightened by rising seas and cyclonic winds?
If our tax base is already weakened by changing demographics and private insurance may become unaffordable, how will we afford the level of investment necessary to adapt to climate change and the likelihood of more frequent and costly natural disasters?
Within these questions, however, lies significant opportunity for a range of industries to position both existing and new products and services to the next generation of government, consumer and private sector buyers.
Talk to Adaptive Capability today about safeguarding and enhancing your business’ future.
*Source: United Nations Intergovernmental Panel on Climate Change Assessment Report 5, released 2014; ranges are approximate and have been estimated from graphs appearing in the report.
**Source: CO2 Now