As business leaders representing a cross-section of the Australian economy, we believe that climate change is a major business risk and we need to act now.

There is broad consensus that climate change is real, the potential impacts are significant and we need to act to reduce greenhouse gas emissions. However, there is currently no agreement on how best to respond, when this response should begin and what it will cost.

Business is understandably concerned about the impact this response could have on Australia’s economy and international competitiveness. We believe there is a need to balance this with the potential impacts of climate change on Australia and the economic costs of continuing policy uncertainty.

Together with the Australian Conservation Foundation, we formed the Australian Business Roundtable on Climate Change. The Roundtable commissioned independent research from CSIRO to quantify climate impacts on Australia. This research confirms that Australia is particularly vulnerable to climate change. The economic impacts are significant and widespread, affecting in particular Australia’s leading export earners, agriculture and tourism. This will have flow-on effects for the whole economy.

However, CSIRO has concluded that reducing global greenhouse emissions will reduce the rate and magnitude of climate change. Even if we cannot avoid further warming, we will have more time to adapt to a harsher and more varied climate.

Given the incentive to act and to act early, the Roundtable commissioned the Allen Consulting Group to analyse what it will cost Australia to substantially reduce its greenhouse gas emissions, as part of an international response, and model the respective costs of early and delayed action.

This research demonstrates that Australia can deliver significant reductions at an affordable cost. Furthermore, the longer we delay action, the more expensive it becomes for business and for the wider Australian economy.

These findings have near-term policy implications for Australia. We support government calls for a collaborative approach to climate change as demonstrated by the Asia Pacific Partnership on Clean Development and Climate and recent Council of Australian Governments initiatives (CoAG). However, we believe Australia needs to do more.

We ask Australian governments to work together, for example, through CoAG to develop nationally consistent climate change policies, supported by all jurisdictions. This approach will ensure that Australia has an economically and environmentally effective national response and provides the necessary certainty for investors.

The Roundtable suggests that business and governments work together to frame policies on three fronts:

The Roundtable believes the full package of recommendations outlined in this report will create the necessary investment conditions to enable Australia to reduce greenhouse gas emissions while maintaining strong economic growth. We believe this response is in the national interest and call on governments to adopt the recommendations now to allow business to respond effectively.