Quantifying the Cost of Climate Change

A highly anticipated judgement of the Queensland Land Court in November 2022 refused permission for the proposed Waratah Coal mine to be developed, because the burning of its coal overseas would cause environmental damage, worsen global climate change and limit the human rights of Indigenous people and children.

If the Waratah Coal mine project had proceeded it would have been one of the largest thermal coal mines in Australia. The Land Court ruling is the first time an Australian judge has recommended rejecting a mine based on the climate impacts of coal burnt overseas. Hence it is a landmark case.

The case featured evidence from experts in the environment, climate change, coal markets, economic analysis and an actuary, Tony Coleman.

Tony gave evidence as an actuary that quantified the anticipated present and future economic impact of climate change on the State of Queensland, including the impact of cyclones, floods, coastal inundation, bushfires and heatwaves. This was the first time, to the writer’s knowledge, that any-one had attempted to quantify the cost of climate change for a specific State of Australia.

The evidence given by Tony Coleman was found to be important because the cost benefit analysis (CBA) put forward by Waratah Coal for their project did not include any costs attributable to greenhouse gas emissions from burning the coal mined nor the likely economic impact on Queensland of the climate change impacts from ongoing greenhouse gas emissions.

In contrast, Tony Coleman’s evidence quantified these costs and demonstrated that the costs were significantly higher than the benefits that would be derived from the project.

Other interesting conclusions arising from the work set out in this paper include:

• Queensland is much more subject to climate change impacts and costs than any other State of Australia,
• The majority of the future climate costs in Queensland will be associated with excess / early deaths from heatwaves, rather than direct property losses although the later are still significant, and
• Bushfires kill far more people from smoke inhalation than they kill directly.

In considering the issues in this case an obvious question arising is “How can one quantify the costs of climate change?” This paper seeks to answer that question.

Find the Q&A here: Q&A on 'The Mangement and Cost of Climate Change'