Put Levy on Fossil Fuel Producers to Pay for Climate Disasters: Australia Institute


The Australia Institute has today released a detailed proposal for a National Climate Disaster Fund (NCDF), to pay for the escalating costs of natural disasters driven by climate change.

Money would be raised for the Fund through a $1 levy per tonne of carbon pollution on fossil fuel production in Australia, which would currently raise around $1.5 billion a year.

Natural disasters are estimated to currently cost Australians around $13 billion per year. These costs will rise dramatically as the frequency and intensity of fires, floods, drought and heatwaves increases as a result of climate change, unless emissions are cut.

“The frequency and intensity of natural disasters such as bushfires and floods will keep increasing while we keep pumping more greenhouse gases into the atmosphere. Australia urgently needs a dedicated, independently administered fund to cope with the ever increasing costs of these disasters,” says Mark Ogge, Principal Adviser at The Australia Institute.

“A $1 per tonne levy would have virtually no effect on energy prices or coal jobs, but would be a huge help to everyone being affected by the damage these activities are causing.

“This policy would help communities to prepare for and recover from natural disasters, but it would also be great for creating jobs and boosting the economy. Industries that face enormous costs as a result of climate change, including agriculture, tourism and manufacturing, would benefit from the fund assisting with disaster recovery and building resilience.

“This is a popular policy, with nearly two out of three Australians supporting it. Polling undertaken for The Australia Institute’s Climate of the Nation 2019 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.”

Mayors from communities affected by the current bushfire crisis across NSW support the proposal.

Lord Mayor of Sydney, Clover Moore, says “The devastating fires, burning across NSW at unprecedented levels, are just the latest reminder that climate change is increasing the severity and frequency of natural disasters.

“If we’re to stop this becoming our new normal, we need the Federal Government to take urgent action to reduce emissions by putting a price on carbon and establishing a Just Transition Authority to ensure people working in fossil fuel industries have jobs to go to as we transition to a green economy. But while we wait for the Federal Government to take serious action, we need to turn our minds to adaptation.

“Industries that continue to profit while contributing to the acceleration of climate change should also contribute to managing its impacts. This will not only help communities recover and adapt, it will help internalise the true cost of burning fossil fuels.”

Bellingen Mayor, Cr Dominic King, says “We’ve never seen conditions like this before. The Bellingen Shire has been experiencing fires since early September and they continue to burn all around us today. It is impacting both the physical and mental health of our residents and we have seen a significant downturn in custom for many of our local businesses. We also understand that this community will continue to have to deal with these horrific conditions all summer and into the future. In fact unless if we don’t reduce emissions, it will just get keep getting worse.

“Fighting fires on this scale will need a lot more resources, and it’s not fair that burden keeps falling on ordinary people and our volunteer firefighters. It’s time those profiting from the activities that are fuelling climate change, particularly those in the fossil fuel industry, started paying for the damage they are causing.”

Glen Innes Mayor, Cr Carol Sparks, says “The NSW bushfires show us the enormous costs and impacts of climate change for local communities.

“Every tonne of coal mined ends up as more greenhouse gas in the atmosphere, fuelling climate change and making catastrophes like these fires worse.

“It is staggering that the coal and gas companies that profit from this don’t have to pay for any of the costs. Our communities are paying the price for their activities. It’s high time they started paying for the damage they are causing.”

Dr Karl Mallon, CEO of Climate Risk Engineers, says “Our analysis suggests that extreme weather costs have increased due to climate change already and will continue to increase.

“This levy is well short of the full investment needed to prepare for climate change disasters, but investment will have to come from somewhere, otherwise through no fault of their own families will be at increasing physical and financial disaster risk.”

The full report is available here.

Related research