Important components of the cost-of-living crisis are a direct result of the climate crisis.
Failure by policy makers to factor in the impacts of climate change on the cost of living, will
limit the government’s ability to address it. Each year we fail to mitigate emissions is
another year we bake in cost-of-living pressure in the future.

Key among these price impacts are the cost of insurance, food and energy. Collectively, food
and insurance account for more than a fifth of the consumer price inflation Australia has
experienced since 2022.

Insurance – As the climate has destabilised, the increase in natural disasters has led to an
increase in payouts for insurance companies and an increase in premiums for homeowners.

One in 20 Australian households now pay more than seven weeks of gross income on home
insurance. In other words, these households work from New Year’s Day to late February,
just to pay their home insurance.

Increases in insurance premiums have hit certain regional areas particularly hard, where
average household incomes are lower than urban areas while premiums are higher.

The price of insurance in many areas of Australia have already become prohibitively
expensive. As continued global heating and more frequent disasters make these problems
worse, whole suburbs or towns will become uninsurable.

Food – Food prices have soared by about 20% since 2020. The planet’s changed weather
patterns have impacted food production and, in some areas, permanently affected a
region’s ability to grow particular crops. Climate impacts mean that even if Coles and
Woolworths stop price gouging, food prices will keep rising.

Energy – Australia’s energy system is complex. Underinvestment in the transition to
renewables and tying ourselves to international pricing mechanisms by exporting fossil fuels
has resulted in high local electricity prices for Australian households. Even if we were to decouple ourselves from this, energy prices would continue to be impacted as more climate
disasters damage vital public infrastructure.