Treasury to restart climate modelling

Treasury has not been able to model the economic impacts of climate change for almost a decade after it was abandoned by former prime minister Tony Abbott.

New Treasurer Jim Chalmers has ordered the Treasury to restart its climate modelling and says work is underway to restore the department's role in climate action.

Treasury is working closely with other departments to rebuild this capacity after years of neglect under the Coalition, and we'll have more to say about this important work, Mr Chalmers told the ABC.

Treasury's modelling will help us chart a path that maximises jobs and opportunities for our country as we take advantage of this transformation.

Australia's economic prospects will be influenced by the ability to take ambitious action on climate change and deliver cheaper and cleaner energy. The head of Treasury admitted last year that it had not been asked for climate modelling since 2013.

The Coalition's plan to reach net zero carbon emissions by 2050 was modelled last year by private consultants McKinsey and had limited involvement from Treasury.

Treasury secretary Steven Kennedy told an estimates committee that just two of its staff had been sent to give advice on the policy.

A generation of economic opportunities had been squandered by the Coalition, according to Chalmers.

The last major review on the impact of climate change on the economy, the Garnaut Review, was commissioned by former prime minister Kevin Rudd in 2007.

Professor Ross Garnaut recommended that a carbon emissions trading scheme be established and found that in worst-case climate scenarios, the Murray-Darling Basin could dry up, the Great Barrier Reef could be destroyed and climate change would cause hurt to wages and increase the costs of goods.

Professor Garnaut said in April that anyone who votes for the election would need to commit to reducing emissions by 75 per cent by 2035 and eliminating coal generation in order to avoid worst-case scenarios.

Labor has committed to a 43 per cent reduction by 2030, an increase from the 26 to 28 per cent target of the Coalition.

Professor Garnaut wrote in the Australian Financial Review that Australians face historic policy challenges.

Fail to deal with them well, and we irretrievably disrupt climate and environmental conditions that underpin Australian lives, lose the chance to regain effective influence in our neighbourhood, and the decline in living standards for ordinary Australians for the last decade. Shadow Treasurer Angus Taylor has been contacted for comment.